10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-55617

Strategic Storage Trust II, Inc.

(Exact name of Registrant as specified in its charter)

Maryland	46-1722812
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

10 Terrace Road

Ladera Ranch, California 92694

(Address of principal executive offices)

(877) 327-3485

(Registrant’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company		☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of November 12, 2018, there were 49,733,630 outstanding shares of Class A common stock and 7,500,273 outstanding shares of Class T common stock of the registrant.

FORM 10-Q

STRATEGIC STORAGE TRUST II, INC.

TABLE OF CONTENTS

		Page No.
	Cautionary Note Regarding Forward-Looking Statements	3
PART I.	FINANCIAL INFORMATION	4
Item 1.	Consolidated Financial Statements:	4
	Consolidated Balance Sheets as of September 30, 2018 (unaudited) and December 31, 2017	5
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	6
	Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	7
	Consolidated Statement of Equity for the Nine Months Ended September 30, 2018 (unaudited)	8
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (unaudited)	9
	Notes to Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53
PART II.	OTHER INFORMATION	53
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	56

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q of Strategic Storage Trust II, Inc., other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission. We cannot guarantee the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations and provide distributions to stockholders, and our ability to find suitable investment properties, may be significantly hindered. See the risk factors identified in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission, as supplemented by the risk factors included in Part II, Item 1A of this Form 10-Q, for a discussion of some, although not all, of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements.

3

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The information furnished in the accompanying unaudited consolidated balance sheets and related consolidated statements of operations, comprehensive loss, equity and cash flows reflects all adjustments (consisting of normal and recurring adjustments) that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned consolidated financial statements.

The accompanying consolidated financial statements should be read in conjunction with the notes to our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report on Form 10-Q. The accompanying consolidated financial statements should also be read in conjunction with our consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2017. Our results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the operating results expected for the full year.

4

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2018 (Unaudited)			December 31, 2017
ASSETS
Real estate facilities:
Land	$	271,343,323		$	272,313,395
Buildings		512,294,410			514,648,107
Site improvements		43,065,688			42,717,975
		826,703,421			829,679,477
Accumulated depreciation		(49,609,050	)		(34,686,973	)
		777,094,371			794,992,504
Construction in process		109,907			92,519
Real estate facilities, net		777,204,278			795,085,023
Cash and cash equivalents		3,739,371			7,355,422
Restricted cash		5,331,656			4,512,990
Other assets, net		11,889,921			5,563,600
Debt issuance costs, net of accumulated amortization		194,957			836,202
Intangible assets, net of accumulated amortization		1,675,543			4,144,601
Total assets	$	800,035,726		$	817,497,838
LIABILITIES AND EQUITY
Debt, net	$	395,909,178		$	396,792,902
Accounts payable and accrued liabilities		13,047,848			7,451,849
Due to affiliates		2,762,261			2,965,904
Distributions payable		2,801,394			2,852,100
Total liabilities		414,520,681			410,062,755
Commitments and contingencies (Note 8)
Redeemable common stock		29,559,784			24,497,059
Equity:
Strategic Storage Trust II, Inc. equity:
Preferred stock, $0.001 par value; 200,000,000 shares authorized; none    issued and outstanding at September 30, 2018 and December 31, 2017		—			—
Class A common stock, $0.001 par value; 350,000,000 shares authorized;    50,090,692 and 49,386,092 shares issued and outstanding at    September 30, 2018 and December 31, 2017, respectively		50,091			49,386
Class T common stock, $0.001 par value; 350,000,000 shares authorized;    7,484,880 and 7,350,142 shares issued and outstanding at    September 30, 2018 and December 31, 2017, respectively		7,485			7,351
Additional paid-in capital		496,325,862			496,287,890
Distributions		(85,669,907	)		(60,561,504	)
Accumulated deficit		(61,181,459	)		(58,641,776	)
Accumulated other comprehensive income		2,243,511			1,369,208
Total Strategic Storage Trust II, Inc. equity		351,775,583			378,510,555
Noncontrolling interests in our Operating Partnership		4,179,678			4,427,469
Total equity		355,955,261			382,938,024
Total liabilities and equity	$	800,035,726		$	817,497,838

See notes to consolidated financial statements.

5

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenues:
Self storage rental revenue	$	19,796,139		$	19,804,298		$	58,784,034		$	56,356,871
Ancillary operating revenue		516,930			135,214			1,441,008			366,963
Total revenues		20,313,069			19,939,512			60,225,042			56,723,834
Operating expenses:
Property operating expenses		6,416,687			6,456,088			18,637,792			18,358,466
Property operating expenses – affiliates		2,571,670			3,307,619			7,687,183			8,145,469
General and administrative		999,439			762,642			3,632,649			2,642,433
Depreciation		5,097,944			5,145,952			15,245,530			14,865,271
Intangible amortization expense		179,613			3,525,476			2,398,378			11,026,239
Acquisition expenses—affiliates		16,422			—			42,642			212,577
Other property acquisition expenses		554,661			—			808,091			292,022
Total operating expenses		15,836,436			19,197,777			48,452,265			55,542,477
Operating income		4,476,633			741,735			11,772,777			1,181,357
Other income (expense):
Interest expense		(4,587,573	)		(4,310,132	)		(13,417,041	)		(11,979,432	)
Interest expense—accretion of fair market value of    secured debt		111,383			113,718			336,894			231,388
Interest expense—debt issuance costs		(330,639	)		(329,877	)		(975,591	)		(1,849,114	)
Other		(127,082	)		(90,608	)		(278,694	)		(219,334	)
Net loss		(457,278	)		(3,875,164	)		(2,561,655	)		(12,635,135	)
Net loss attributable to the noncontrolling interests    in our Operating Partnership		5,854			34,389			21,972			100,585
Net loss attributable to Strategic Storage Trust II, Inc.    common stockholders	$	(451,424	)	$	(3,840,775	)	$	(2,539,683	)	$	(12,534,550	)
Net loss per Class A share – basic and diluted	$	(0.01	)	$	(0.07	)	$	(0.04	)	$	(0.22	)
Net loss per Class T share – basic and diluted	$	(0.01	)	$	(0.07	)	$	(0.04	)	$	(0.22	)
Weighted average Class A shares outstanding – basic    and diluted		49,948,074			48,958,361			49,732,757			48,609,924
Weighted average Class T shares outstanding – basic    and diluted		7,461,101			7,281,358			7,418,129			7,212,753

See notes to consolidated financial statements.

6

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Net loss	$	(457,278	)	$	(3,875,164	)	$	(2,561,655	)	$	(12,635,135	)
Other comprehensive income (loss):
Foreign currency translation adjustment		1,343,451			3,083,732			(2,061,322	)		4,446,136
Foreign currency forward contract gains (losses)		(1,083,267	)		(3,087,699	)		2,431,232			(4,546,081	)
Interest rate swap and cap contract gains (losses)		(5,139	)		156,426			504,393			74,362
Other comprehensive income (loss)		255,045			152,459			874,303			(25,583	)
Comprehensive loss		(202,233	)		(3,722,705	)		(1,687,352	)		(12,660,718	)
Comprehensive loss attributable to noncontrolling    interests:
Comprehensive loss attributable to the    noncontrolling interests in our Operating    Partnership		2,589			33,036			14,473			100,789
Comprehensive loss attributable to Strategic Storage    Trust II, Inc. common stockholders	$	(199,644	)	$	(3,689,669	)	$	(1,672,879	)	$	(12,559,929	)

See notes to consolidated financial statements.

7

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)

	Common Stock
	Class A						Class T
	Number of Shares			Common Stock Par Value			Number of Shares			Common Stock Par Value			Additional Paid-in Capital			Distributions			Accumulated Deficit			Accumulated Other Comprehensive Income			Total Strategic Storage Trust II, Inc. Equity			Noncontrolling Interests in our Operating Partnership			Total Equity			Redeemable Common Stock
Balance as of December 31, 2017		49,386,092		$	49,386			7,350,142		$	7,351		$	496,287,890		$	(60,561,504	)	$	(58,641,776	)	$	1,369,208		$	378,510,555		$	4,427,469		$	382,938,024		$	24,497,059
Offering costs		—			—			—			—			(15,364	)		—			—			—			(15,364	)		—			(15,364	)		—
Changes to redeemable common stock		—			—			—			—			(12,041,524	)		—			—			—			(12,041,524	)		—			(12,041,524	)		12,041,524
Redemptions of common stock		(304,672	)		(305	)		(18,515	)		(19	)		—			—			—			—			(324	)		—			(324	)		(6,978,799	)
Issuance of restricted stock		10,500			11			—			—			—			—			—			—			11			—			11			—
Distributions		—			—			—			—			—			(25,108,403	)		—			—			(25,108,403	)		—			(25,108,403	)		—
Distributions to noncontrolling    interests		—			—			—			—			—			—			—			—			—			(225,819	)		(225,819	)		—
Issuance of shares for distribution    reinvestment plan		998,772			999			153,253			153			12,041,524			—			—			—			12,042,676			—			12,042,676			—
Stock compensation expense		—			—			—			—			53,336			—			—			—			53,336			—			53,336			—
Net loss attributable to Strategic Storage    Trust II, Inc.		—			—			—			—			—			—			(2,539,683	)		—			(2,539,683	)		—			(2,539,683	)		—
Net loss attributable to the noncontrolling    interests in our Operating Partnership		—			—			—			—			—			—			—			—			—			(21,972	)		(21,972	)		—
Foreign currency translation adjustment		—			—			—			—			—			—			—			(2,061,322	)		(2,061,322	)		—			(2,061,322	)		—
Foreign currency forward contract gains		—			—			—			—			—			—			—			2,431,232			2,431,232			—			2,431,232			—
Interest rate swap and cap contract gains		—			—			—			—			—			—			—			504,393			504,393			—			504,393			—
Balance as of September 30, 2018		50,090,692		$	50,091			7,484,880		$	7,485		$	496,325,862		$	(85,669,907	)	$	(61,181,459	)	$	2,243,511		$	351,775,583		$	4,179,678		$	355,955,261		$	29,559,784

See notes to consolidated financial statements.

8

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net loss	$	(2,561,655	)	$	(12,635,135	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		17,643,908			25,891,510
Accretion of fair market value adjustment of secured debt		(336,894	)		(231,388	)
Amortization of debt issuance costs		975,591			1,096,071
Expense related to issuance of restricted stock		53,336			21,347
Unrealized derivative gains		(21,779	)		—
Increase (decrease) in cash from changes in assets and liabilities:
Other assets, net		(1,244,202	)		(2,563,309	)
Accounts payable and accrued liabilities		1,561,727			3,985,234
Due to affiliates		304,265			117,085
Net cash provided by operating activities		16,374,297			15,681,415
Cash flows from investing activities:
Purchase of real estate		—			(49,432,644	)
Additions to real estate		(1,112,143	)		(2,797,888	)
Investment in Joint Venture		(3,174,033	)		—
Settlement of foreign currency hedges		2,132,261			(4,072,790	)
Net cash used in investing activities		(2,153,915	)		(56,303,322	)
Cash flows from financing activities:
Gross proceeds from issuance of debt		5,000,000			166,186,951
Pay down of debt		(2,200,000	)		(127,671,050	)
Scheduled principal payments on debt		(1,603,805	)		(1,109,798	)
Debt issuance costs		(163,820	)		(528,744	)
Prepaid debt issuance costs		(1,075,000	)		—
Gross proceeds from issuance of common stock		—			18,879,430
Offering costs		(526,598	)		(2,152,888	)
Redemption of common stock		(3,064,408	)		(1,085,756	)
Distributions paid to common stockholders		(13,115,607	)		(12,425,167	)
Distributions paid to noncontrolling interests in our Operating Partnership		(226,646	)		(177,398	)
Net cash provided by (used in) financing activities		(16,975,884	)		39,915,580
Impact of foreign exchange rate changes on cash and restricted cash		(41,883	)		230,116
Change in cash, cash equivalents, and restricted cash		(2,797,385	)		(476,211	)
Cash, cash equivalents, and restricted cash beginning of period		11,868,412			18,034,805
Cash, cash equivalents, and restricted cash end of period	$	9,071,027		$	17,558,594
Supplemental disclosures and non-cash transactions:
Cash paid for interest	$	13,534,949		$	11,694,161
Supplemental disclosure of noncash activities:
Deposits applied to purchase of real estate facilities	$	—		$	250,000
Debt and accrued liabilities assumed during purchase of real estate facilities	$	—		$	39,967,786
Prepaid debt issuance costs included in accounts payable and accrued liabilities	$	155,439		$	—
Additions to real estate and construction in process included in accounts payable	$	65,160		$	—
Redemption of common stock included in accounts payable and accrued    liabilities	$	4,638,448		$	646,796
Transfer of construction in process to real estate facilities	$	—		$	1,782,546
Offering costs included in due to affiliates	$	—		$	299,299
Foreign currency contracts, interest rate swaps, and interest rate cap    contract in accounts payable and accrued liabilities and other assets	$	735,942		$	574,120
Issuance of shares pursuant to distribution reinvestment plan	$	12,042,676		$	11,988,010
Distributions payable	$	2,801,394		$	2,743,955
Issuance of units in our Operating Partnership for purchase of real estate    facilities	$	—		$	4,875,454

See notes to consolidated financial statements.

9

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Note 1. Organization

Strategic Storage Trust II, Inc., a Maryland corporation (the “Company”), was formed on January 8, 2013 under the Maryland General Corporation Law for the purpose of engaging in the business of investing in self storage facilities. The Company’s year-end is December 31. As used in this report, “we,” “us,” “our,” and “Company” refer to Strategic Storage Trust II, Inc. and each of our subsidiaries.

SmartStop Asset Management, LLC, a Delaware limited liability company (our “Sponsor”) organized in 2013, was the sponsor of our Offering of shares of our common stock, as described below. Our Sponsor is a company focused on providing real estate advisory, asset management, and property management services. Our Sponsor owns 97.5% of the economic interests (and 100% of the voting membership interests) of Strategic Storage Advisor II, LLC (our “Advisor”) and owns 100% of Strategic Storage Property Management II, LLC (our “Property Manager”).

On October 1, 2015, SmartStop Self Storage, Inc. (“SmartStop”) and Extra Space Storage Inc. (“Extra Space”), along with subsidiaries of each of SmartStop and Extra Space, closed on a merger transaction (the “Extra Space Merger”) in which SmartStop was acquired by Extra Space for $13.75 per share in cash, representing an enterprise value of approximately $1.4 billion. At the closing of the Extra Space Merger, our Sponsor, which was previously owned by SmartStop, was sold to an entity controlled by H. Michael Schwartz, our Chairman of the Board of Directors and Chief Executive Officer, and became our Sponsor. The former executive management team of SmartStop continued to serve on the executive management team for our Sponsor. In addition, the majority of our management team at the time of the Extra Space Merger continues to serve on our management team, as well as the management team of our Advisor and Property Manager.

We have no employees. Our Advisor, a Delaware limited liability company, was formed on January 8, 2013. Our Advisor is responsible for managing our affairs on a day-to-day basis and identifying and making acquisitions and investments on our behalf under the terms of the advisory agreement we have with our Advisor (our “Advisory Agreement”). The officers of our Advisor, as well as a majority of the officers of our Sponsor, are also officers of us.

Our Articles of Amendment and Restatement, as amended, authorized 350,000,000 shares of Class A common stock, $0.001 par value per share (the “Class A Shares”) and 350,000,000 shares of Class T common stock, $0.001 par value per share (the “Class T Shares”) and 200,000,000 shares of preferred stock with a par value of $0.001. We offered a maximum of $1.0 billion in common shares for sale to the public (the “Primary Offering”) and $95.0 million in common shares for sale pursuant to our distribution reinvestment plan (collectively, the “Offering”).

On January 10, 2014, the Securities and Exchange Commission (“SEC”) declared our registration statement effective. On May 23, 2014, we satisfied the $1.5 million minimum offering requirements of our Offering and commenced formal operations. On January 9, 2017, our Offering terminated. We sold approximately 48 million Class A Shares and approximately 7 million Class T Shares for approximately $493 million and $73 million respectively, in our Offering. On November 30, 2016, prior to the termination of our Offering, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $100.9 million in shares under our distribution reinvestment plan (our “DRP Offering”). The DRP Offering may be terminated at any time upon 10 days’ prior written notice to stockholders. As of September 30, 2018, we had sold approximately 2.4 million Class A Shares and approximately 0.4 million Class T Shares for approximately $24.3 million and $3.7 million, respectively, in our DRP Offering.

We invested the net proceeds from our Offering primarily in self storage facilities. As of September 30, 2018, we owned 83 self storage facilities located in 14 states (Alabama, California, Colorado, Florida, Illinois, Indiana, Maryland, Michigan, New Jersey, Nevada, North Carolina, Ohio, South Carolina and Washington) and Canada (the Greater Toronto Area).

On April 19, 2018, our board of directors, upon recommendation of our Nominating and Corporate Governance Committee, approved an estimated value per share of our common stock of $10.65 for our Class A Shares and Class T Shares 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 a fully diluted basis, calculated as of December 31, 2017.

10

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

As a result of the calculation of our estimated value per share, beginning in May 2018, shares sold pursuant to our distribution reinvestment plan are being sold at the estimated value per share of $10.65 for both Class A Shares and Class T Shares.

Our operating partnership, Strategic Storage Operating Partnership II, L.P., a Delaware limited partnership (our “Operating Partnership”), was formed on January 9, 2013. During 2013, our Advisor purchased limited partnership interests in our Operating Partnership for $200,000 and on August 2, 2013, we contributed the initial $1,000 capital contribution we received to our Operating Partnership in exchange for the general partner interest. In conjunction with the Toronto Merger (as defined in Note 7) we issued an aggregate of approximately 483,197 Class A Units of our Operating Partnership to the common stockholders of Strategic Storage Toronto Properties REIT, Inc. (“SS Toronto”), consisting of Strategic 1031, LLC (“Strategic 1031”), a subsidiary of our Sponsor, and SS Toronto REIT Advisors, Inc., an affiliate of our Sponsor. Our Operating Partnership owns, directly or indirectly through one or more special purpose entities, all of the self storage properties that we acquire. As of September 30, 2018, we owned approximately 99.1% of the common units of limited partnership interests of our Operating Partnership. The remaining approximately 0.9% of the common units are owned by our Advisor, Strategic 1031, and SS Toronto REIT Advisors, Inc. As the sole general partner of our Operating Partnership, we have the exclusive power to manage and conduct the business of our Operating Partnership. We conduct certain activities through our taxable REIT subsidiary, Strategic Storage TRS II, Inc., a Delaware corporation (the “TRS”), which is a wholly-owned subsidiary of our Operating Partnership.

Our Property Manager was formed on January 8, 2013 to manage our properties. Our Property Manager derives substantially all of its income from the property management services it performs for us. Our Property Manager may enter into sub-property management agreements with third party management companies and pay part of its management fee to such sub-property manager. From October 1, 2015 through September 30, 2017, our Property Manager contracted with Extra Space for Extra Space to serve as the sub-property manager for each of our properties located in the United States pursuant to separate sub-property management agreements for each property.  

On October 1, 2017, our Property Manager terminated its sub-property management agreements with Extra Space and our Property Manager began managing all of our properties in the United States directly. In connection therewith, an affiliate of our Property Manager reacquired the rights to the “SmartStop® Self Storage” brand in the United States. As a result, we began using the “SmartStop® Self Storage” brand at our United States properties effective October 1, 2017. Please see Note 7 – Related Party Transactions – Property Management Agreement.

All properties owned or acquired in Canada have been and will continue to be managed by a subsidiary of our Sponsor and are branded using the SmartStop® Self Storage brand.

Our dealer manager is Select Capital Corporation, a California corporation (our “Dealer Manager”). Our Dealer Manager was responsible for marketing our shares offered pursuant to our Primary Offering. Our Sponsor owns a 15% non-voting equity interest in our Dealer Manager. Affiliates of our Dealer Manager own a 2.5% non-voting membership interest in our Advisor.

Our Sponsor owns 100% of the membership interests of Strategic Transfer Agent Services, LLC, our transfer agent (our “Transfer Agent”). On May 31, 2018, the Company executed an agreement (the “Transfer Agent Agreement”), with our Transfer Agent to provide transfer agent and registrar services to us that are substantially similar to what a third party transfer agent would provide in the ordinary course of performing its functions as a transfer agent. Our Transfer Agent may retain and supervise third party vendors in its efforts to administer certain services. Please see Note 7 – Related Party Transactions – Transfer Agent Agreement.

As we accepted subscriptions for shares of our common stock, we transferred all of the net offering proceeds to our Operating Partnership as capital contributions in exchange for additional units of interest in our Operating Partnership. However, we were deemed to have made capital contributions in the amount of gross proceeds received from investors, and our Operating Partnership was deemed to have simultaneously paid the sales commissions and other costs associated with the Offering. In addition, our Operating Partnership is structured to make distributions with respect to limited partnership units that are equivalent to the distributions made to holders of common stock. Finally, a limited partner in our Operating Partnership may later exchange his or her limited partnership units in our Operating Partnership for shares of our common stock at any time after one year following the date of issuance of their limited partnership units, subject to certain restrictions

11

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

outlined in our Operating Partnership’s limited partnership agreement (the “Operating Partnership Agreement”). Our Advisor is prohibited from exchanging or otherwise transferring its limited partnership units so long as it is acting as our Advisor pursuant to our Advisory Agreement.

On October 1, 2018, we, our Operating Partnership, and SST II Growth Acquisition, LLC, our wholly-owned subsidiary (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Strategic Storage Growth Trust, Inc. (“SSGT”), a non-traded REIT sponsored by our Sponsor, and SS Growth Operating Partnership, L.P. (“SSGT OP”).  Pursuant to the terms of the Merger Agreement, SSGT will merge with and into Merger Sub, with Merger Sub being the surviving entity (the “REIT Merger”), and immediately after the REIT Merger, SSGT OP will merge with and into our Operating Partnership, with our Operating Partnership continuing as the surviving entity and our subsidiary (the “Partnership Merger” and, together with the REIT Merger, the “Mergers”).  See Note 11, Potential Merger, for additional information related to the Mergers and other transactions contemplated by the Merger Agreement.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC.

Principles of Consolidation

Our financial statements, and the financial statements of our Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these entities not wholly-owned by us is presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated in consolidation.

Consolidation Considerations

Current accounting guidance provides a framework for identifying a variable interest entity (“VIE”) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and noncontrolling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. Our Operating Partnership is deemed to be a VIE and is consolidated by the Company as the primary beneficiary.

As of December 31, 2017, we had not entered into any other contracts/interests that would be deemed to be variable interests in VIEs other than our Operating Partnership.  As of September 30, 2018, we had not entered into any other contracts/interest that would be deemed to be variable interest in VIEs other than our tenant insurance joint venture and a real estate joint venture, both of which are accounted for under the equity method of accounting.  Please see Note 3 – Real Estate Facilities for further discussion regarding our joint venture with SmartCentres and Note 7 – Related Party Transactions for further discussions regarding our tenant insurance joint venture. Other than these joint ventures, we do not currently have any relationships with unconsolidated entities or financial partnerships.

Under the equity method, our investments in real estate joint ventures will be stated at cost and adjusted for our share of net earnings or losses and reduced by distributions. Equity in earnings of real estate joint ventures will generally be recognized based on our ownership interest in the earnings of each of the unconsolidated real estate joint ventures.

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STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Noncontrolling Interest in Consolidated Entities

We account for the noncontrolling interest in our Operating Partnership in accordance with the related accounting guidance. Due to our control through our general partnership interest in our Operating Partnership and the limited rights of the limited partner, our Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company and the limited partner interest is reflected as a noncontrolling interest in the accompanying consolidated balance sheets. The noncontrolling interest shall be attributed its share of income and losses, even if that attribution results in a deficit noncontrolling interest balance.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Management will adjust such estimates when facts and circumstances dictate. Actual results could materially differ from those estimates. The most significant estimates made include the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed at relative fair value, the determination if certain entities should be consolidated, the evaluation of potential impairment of long-lived assets, and the estimated useful lives of real estate assets and intangibles.

Cash and Cash Equivalents

We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents.

We may maintain cash and cash equivalents in financial institutions in excess of insured limits, but believe this risk will be mitigated by only investing in or through major financial institutions.

Restricted Cash

Restricted cash consists primarily of impound reserve accounts for property taxes, insurance and capital improvements in connection with the requirements of certain of our loan agreements.

Real Estate Purchase Price Allocation

We account for acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values. This guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs as of the acquisition date.

The value of the tangible assets, consisting of land and buildings is determined as if vacant. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases are month-to-month contracts. We also consider whether in-place, market leases represent an intangible asset. We recorded $0 and approximately $4.4 million in intangible assets to recognize the value of in-place leases related to our acquisitions during the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively. We do not expect, nor to date have we recorded, intangible assets for the value of customer relationships because we expect we will not have concentrations of significant customers and the average customer turnover will be fairly frequent.

Allocation of purchase price to acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available.

In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework provides guidance for

13

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. We adopted this ASU on January 1, 2018. We expect that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. As a result, once an acquisition is deemed probable, transaction costs are capitalized rather than expensed. We have yet to acquire any properties that require capitalization of acquisition related transaction costs that would have previously been expensed under the guidance in effect prior to January 1, 2018.

During the three months ended September 30, 2018 and 2017, we expensed approximately $0.6 million and none, respectively, of acquisition-related transaction costs that did not meet our capitalization policy during the respective periods. During the nine months ended September 30, 2018 and 2017, we expensed approximately $0.9 million and $0.5 million, respectively, of acquisition-related transaction costs that did not meet our capitalization policy during the respective periods.

Evaluation of Possible Impairment of Long-Lived Assets

Management monitors events and changes in circumstances that could indicate that the carrying amounts of our long-lived assets may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of the assets may not be recoverable, we will assess the recoverability of the assets by determining whether the carrying value of the long-lived assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, we will adjust the value of the long-lived assets to the fair value and recognize an impairment loss. For the three and nine months ended September 30, 2018 and 2017, no impairment losses were recognized.

Revenue Recognition

Management believes that all of our leases are operating leases. Rental income is recognized in accordance with the terms of the leases, which generally are month-to-month. Revenues from any long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents received over amounts contractually due pursuant to the underlying leases is included in accounts payable and accrued liabilities in our consolidated balance sheets and contractually due but unpaid rent is included in other assets.

Allowance for Doubtful Accounts

Tenant accounts receivable is reported net of an allowance for doubtful accounts. Management’s estimate of the allowance is based upon a review of the current status of tenant accounts receivable. It is reasonably possible that management’s estimate of the allowance will change in the future.

Real Estate Facilities

Real estate facilities are recorded based on relative fair value as of the date of acquisition. We capitalize costs incurred to develop, construct, renovate and improve properties, including interest and property taxes incurred during the construction period. The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress. The construction period ends when the asset is substantially complete and ready for its intended use.

Depreciation of Real Property Assets

Our management is required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives.

14

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Depreciation of our real property assets is charged to expense on a straight-line basis over the estimated useful lives
as follows:

Description	Standard Depreciable Life
Land	Not Depreciated
Buildings	30-35 years
Site Improvements	7-10 years

Depreciation of Personal Property Assets

Personal property assets consist primarily of furniture, fixtures and equipment and are depreciated on a straight-line basis over the estimated useful lives generally ranging from 3 to 5 years, and are included in other assets on our consolidated balance sheets.

Intangible Assets

We have allocated a portion of our real estate purchase price to in-place lease intangibles. We are amortizing in-place lease intangibles on a straight-line basis over the estimated future benefit period. As of September 30, 2018, the gross amounts allocated to in-place lease intangibles was approximately $34 million and accumulated amortization of in-place lease intangibles totaled approximately $32 million. As of December 31, 2017, the gross amounts allocated to in-place lease intangibles was approximately $34 million and accumulated amortization of in-place lease intangibles totaled approximately $30 million.

The total estimated future amortization expense of intangible assets for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter is approximately $25,000, $0.1 million, $0.1 million, $0.1 million, $0.1 million, and $1.2 million respectively.

Debt Issuance Costs

The net carrying value of costs incurred in connection with our revolving credit facility are presented as debt issuance costs on our consolidated balance sheets. Debt issuance costs are amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. As of September 30, 2018 and December 31, 2017, accumulated amortization of debt issuance costs related to our revolving credit facility totaled approximately $2.1 million and $1.5 million, respectively.

The net carrying value of costs incurred in connection with obtaining non revolving debt are presented on the balance sheet as a deduction from debt (see Note 5). Debt issuance costs are amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. As of September 30, 2018 and December 31, 2017, accumulated amortization of debt issuance costs related to non-revolving debt totaled approximately $0.9 million and $0.6 million, respectively.

Offering Costs

We pay our Dealer Manager an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering. We will cease paying the stockholder servicing fee with respect to the Class T Shares sold in the Primary Offering at the earlier of (i) the date we list our shares on a national securities exchange, merge or consolidate with or into another entity, or sell or dispose of all or substantially all of our assets, (ii) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of both Class A Shares and Class T Shares in our Primary Offering (i.e., excluding proceeds from sales pursuant to our distribution reinvestment plan), which calculation shall be made by us with the assistance of our Dealer Manager commencing after the termination of the Primary Offering; (iii)  the fifth anniversary of the last day of the fiscal quarter in which our Primary Offering (i.e., excluding our distribution reinvestment plan offering) terminated; and (iv) the date that such Class T Share is redeemed or is no longer outstanding. Our Dealer

15

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Manager entered into participating dealer agreements with certain other broker-dealers which authorized them to sell our shares. Upon sale of our shares by such broker-dealers, our Dealer Manager re-allowed all of the sales commissions and, subject to certain limitations, the stockholder servicing fees paid in connection with sales made by these broker-dealers. Our Dealer Manager was also permitted to re-allow to these broker-dealers a portion of their dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by our Dealer Manager, payment of attendance fees required for employees of our Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. Our Dealer Manager also received reimbursement of bona fide due diligence expenses; however, to the extent the due diligence expenses could not be justified, any excess over actual due diligence expenses would have been considered underwriting compensation subject to a 10% FINRA limitation and, when aggregated with all other non-accountable expenses in connection with our Public Offering, could not exceed 3% of gross offering proceeds from sales in the Public Offering. We recorded a liability within Due to affiliates for the future estimated stockholder servicing fees at the time of sale of Class T Shares as an offering cost.

Foreign Currency Translation

For non-U.S. functional currency operations, assets and liabilities are translated to U.S. dollars at current exchange rates. Revenues and expenses are translated at the average rates for the period. All related adjustments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. Transactions denominated in a currency other than the functional currency of the related operation are recorded at rates of exchange in effect at the date of the transaction. Gains or losses on foreign currency transactions are recorded in other income (expense).

Redeemable Common Stock

We adopted a share redemption program that enables stockholders to sell their shares to us in limited circumstances.

We record amounts that are redeemable under the share redemption program as redeemable common stock in the accompanying consolidated balance sheets since the shares are redeemable at the option of the holder and therefore their redemption is outside our control. The maximum amount redeemable under our share redemption program is limited to the number of shares we can repurchase with the amount of the net proceeds from the sale of shares under the distribution reinvestment plan. However, accounting guidance states that determinable amounts that can become redeemable should be presented as redeemable when such amount is known. Therefore, the net proceeds from the distribution reinvestment plan are considered to be temporary equity and are presented as redeemable common stock in the accompanying consolidated balance sheets.

In addition, current accounting guidance requires, among other things, that financial instruments that represent a mandatory obligation of us to repurchase shares be classified as liabilities and reported at settlement value. Our redeemable common shares are contingently redeemable at the option of the holder. When we determine we have a mandatory obligation to repurchase shares under the share redemption program, we reclassify such obligations from temporary equity to a liability based upon their respective settlement values.

For the year ended December 31, 2017, we received redemption requests totaling approximately $2.2 million (approximately 0.2 million shares), approximately $1.5 million of which were fulfilled during the year ended December 31, 2017, with the remaining approximately $0.7 million included in accounts payable and accrued liabilities as of December 31, 2017 and fulfilled in January 2018.  For the nine months ended September 30, 2018, we received redemption requests totaling approximately $7.0 million (approximately 0.7 million shares), approximately $2.3 million of which were fulfilled in April and July of 2018, and approximately $4.6 million of which were included in accounts payable and accrued liabilities as of September 30, 2018, and fulfilled in October of 2018.

Accounting for Equity Awards

The cost of restricted stock is required to be measured based on the grant date fair value and the cost recognized over the relevant service period.

16

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Fair Value Measurements

Under GAAP, we are required to measure certain financial instruments at fair value on a recurring basis. In addition, we are required to measure other financial instruments and balances at fair value on a non-recurring basis. Fair value is defined by the accounting standard for fair value measurements and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value we use when measuring fair value:

• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;

• Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as interest rates and yield curves that are observable at commonly quoted intervals; and

• Level 3 inputs are unobservable inputs for the assets or liabilities that are typically based on an entity’s own assumptions as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level that is significant to the fair value measurement in its entirety.

The accounting guidance for fair value measurements and disclosures provides a framework for measuring fair value and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In determining fair value, we will utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment will be necessary to interpret Level 2 and 3 inputs in determining fair value of our financial and non-financial assets and liabilities. Accordingly, there can be no assurance that the fair values we will present will be indicative of amounts that may ultimately be realized upon sale or other disposition of these assets.

Financial and non-financial assets and liabilities measured at fair value on a non-recurring basis in our consolidated financial statements consist of real estate and related liabilities assumed related to our acquisitions. The fair values of these assets and liabilities were determined as of the acquisition dates using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity. In general, we consider multiple valuation techniques when measuring fair values. However, in certain circumstances, a single valuation technique may be appropriate. All of the fair values of the assets and liabilities as of the acquisition dates were derived using Level 3 inputs.

The carrying amounts of cash and cash equivalents, restricted cash, other assets, variable-rate debt, accounts payable and accrued liabilities, distributions payable and amounts due to affiliates approximate fair value.

The table below summarizes our fixed rate notes payable at September 30, 2018 and December 31, 2017. The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of the fixed rate notes payable was estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented below are not necessarily indicative of the amounts we would realize in a current market exchange.

	September 30, 2018				December 31, 2017
	Fair Value		Carrying Value		Fair Value		Carrying Value
Fixed Rate Secured Debt	$	205,700,000	$	217,430,858	$	213,300,000	$	218,332,483

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STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

As of September 30, 2018, we had interest rate swaps, an interest rate cap, and a net investment hedge (See Notes 5 and 6). The valuations of these instruments were determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative. The analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair value of the interest rate swaps were determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash payments.  Our fair values of our net investment hedges are based on the change in the spot rate at the end of the period as compared with the strike price at inception.

To comply with GAAP, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of derivative contracts for the effect of non-performance risk, we will consider the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we had determined that the majority of the inputs used to value our derivatives were within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, through September 30, 2018, we had assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

We record all derivatives on our balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. We may enter into derivative contracts that are intended to economically hedge certain of our risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.

For derivatives designated as net investment hedges, the effective portion of changes in the fair value of the derivatives are reported in accumulated other comprehensive income. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts are reclassified out of other comprehensive income into earnings when the hedged net investment is either sold or substantially liquidated.

Income Taxes

We made an election to be taxed as a Real Estate Investment Trust (“REIT”), under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2014. To qualify as a REIT, we must continue to meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the REIT’s ordinary taxable income to stockholders (which is computed without regard to the dividends paid deduction or net capital gains and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the IRS grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for federal income tax purposes.

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STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Even if we continue to qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income.

We filed an election to treat our TRS as a taxable REIT subsidiary effective January 1, 2014. In general, the TRS performs additional services for our customers and generally engages in any real estate or non-real estate related business. The TRS is subject to corporate federal and state income tax. The TRS follows accounting guidance which requires the use of the asset and liability method. Deferred income taxes represent the tax effect of future differences between the book and tax bases of assets and liabilities.

Per Share Data

Basic earnings per share attributable to our common stockholders for all periods presented are computed by dividing net income (loss) attributable to our common stockholders by the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed by including the dilutive effect of unvested restricted stock, utilizing the treasury stock method. For all periods presented, the dilutive effect of unrestricted stock was not included in the diluted weighted average shares as such shares were antidilutive.

Recently Issued Accounting Guidance

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” as ASC Topic 606. The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new standard, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. This ASU was applied using the modified retrospective approach. We have determined that our self storage rental revenues are not subject to the guidance in ASU 2014-09, as they qualify as lease contracts, which are excluded from its scope. We adopted this ASU on January 1, 2018 and its adoption did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 amends the guidance on accounting for leases. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02, lessor accounting is largely unchanged. It also includes extensive amendments to the disclosure requirements. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted for financial statements that have not yet been made available for issuance. ASU 2016-02 requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. While we continue to evaluate the standard, based upon our assessment to date, we do not anticipate the adoption of this standard will have a material impact on our consolidated financial statements, because substantially all of our lease revenues are derived from month-to-month leases.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 requires companies to include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and is applied retrospectively to all periods presented. We adopted this guidance on January 1, 2018 and have begun presenting restricted cash along with cash and cash equivalents in our consolidated statements of cash flows.  As a result of adopting the new guidance, approximately $1.7 million of restricted cash which was previously included as operating cash outflows, and approximately $0.7 million of restricted cash which was previously included as investing cash outflows within the consolidated statements of cash flows for the nine months ended September 30, 2017, have been removed and are now included in the cash, cash equivalents, and restricted cash line items at the beginning and end of the period.

19

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Note 3. Real Estate Facilities

The following summarizes the activity in real estate facilities during the nine months ended September 30, 2018:

Real estate facilities
Balance at December 31, 2017	$	829,679,477
Impact of foreign exchange rate changes		(4,135,139	)
Improvements and additions		1,159,083
Balance at September 30, 2018	$	826,703,421
Accumulated depreciation
Balance at December 31, 2017	$	(34,686,973	)
Depreciation expense		(15,060,835	)
Impact of foreign exchange rate changes		138,758
Balance at September 30, 2018	$	(49,609,050	)

Joint Venture with SmartCentres

In January 2018, a subsidiary of our Sponsor entered into a contribution agreement (the “Contribution Agreement”) with a subsidiary of SmartCentres Real Estate Investment Trust, an unaffiliated third party (“SmartCentres”), for a tract of land owned by SmartCentres and located in East York, Ontario (the “East York Lot”) in Canada. In March 2018, the interest in the Contribution Agreement was assigned to one of our subsidiaries.

On June 28, 2018, we closed on the East York Lot, which is now owned by a limited partnership (the “Limited Partnership”), in which we (through our subsidiary) and SmartCentres (through its subsidiary) are each a 50% limited partner and each have an equal ranking general partner in the Limited Partnership. At closing, we subscribed for 50% of the units in the Limited Partnership at an agreed upon subscription price of approximately $3.8 million CAD, representing a contribution equivalent to 50% of the agreed upon fair market value of the land. The Limited Partnership intends to develop a self storage facility on the East York Lot. The value of the land contributed to the Limited Partnership had an agreed upon fair market value of approximately $7.6 million CAD.

Note 4. Pro Forma Financial Information (Unaudited)

The table set forth below summarizes, on a pro forma basis, the combined results of operations of the Company for the nine months ended September 30, 2018 and 2017. Such presentation reflects the Company’s acquisitions that occurred during 2017, which met the GAAP definition of a business in effect at that time, as if the acquisitions had occurred as of January 1, 2016. However, for acquisitions of lease-up properties that were not operational as of these dates, the pro forma information includes these acquisitions as of the date that formal operations began. There were no acquisitions completed during the nine months ended September 30, 2018. This pro forma information does not purport to represent what the actual consolidated results of operations of the Company would have been for the periods indicated, nor does it purport to predict the results of operations for future periods.

	For the nine months ended
	September 30, 2018			September 30,  2017
Pro forma revenue	$	60,225,042		$	57,188,309
Pro forma operating expenses		(46,127,260	)		(45,442,165	)
Pro forma net loss attributable to common stockholders		(234,620	)		(2,291,516	)

The pro forma financial information for the nine months ended September 30, 2018 and 2017 was adjusted to exclude $0 and approximately $0.5 million, respectively, for acquisition related expenses.

20

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Note 5. Debt

The Company’s debt is summarized as follows:

Encumbered Property	September 30, 2018			December31, 2017			Interest Rate			Maturity Date
Raleigh/Myrtle Beach promissory note(1)	$	11,929,458		$	12,076,470			5.73	%	9/1/2023
Amended KeyBank Credit Facility(2)		89,182,500			86,382,500		4.76		%(11)	12/22/2018(13)
Milton fixed rate(3)		5,040,575			5,238,606			5.81	%	10/15/2018(12)
Burlington I fixed rate(3)		4,905,228			5,120,423			5.98	%	10/15/2018(12)
Burlington I variable rate(3)		2,336,370			2,402,418			5.97	%	10/15/2018(12)
Oakville I variable rate(3)		7,799,019			8,019,489			5.45	%	12/31/2018(12)
Burlington II and Oakville II variable rate(3)		12,286,742			12,834,819			4.34	%	2/28/2021(12)
Oakland and Concord loan(4)		19,604,712			19,960,190			3.95	%	4/10/2023
KeyBank CMBS Loan(5)		95,000,000			95,000,000			3.89	%	8/1/2026
KeyBank Florida CMBS Loan(6)		52,000,000			52,000,000			4.65	%	5/1/2027
$11M KeyBank Subordinate Loan(7)		11,000,000			11,000,000		6.01		%(11)	6/1/2020
Midland North Carolina CMBS Loan(8)		47,249,999			47,249,999			5.31	%	8/1/2024
Dufferin loan(9)		10,541,343			11,172,315			3.21	%	5/31/2019(12)
Mavis loan(9)		8,885,034			9,416,609			3.21	%	5/31/2019(12)
Brewster loan(9)		5,807,151			6,154,532			3.21	%	5/31/2019(12)
Granite variable rate loan(10)		6,906,378			7,101,614			6.45	%	12/1/2018(12)
Centennial variable rate loan(10)		6,202,444			6,377,780			6.70	%	12/1/2018(12)
Premium on secured debt, net		1,305,598			1,646,988
Debt issuance costs, net		(2,073,373	)		(2,361,850	)
Total debt	$	395,909,178		$	396,792,902

⁽¹⁾ Fixed rate debt with principal and interest payments due monthly. This promissory note is encumbered by five properties (Morrisville, Cary, Raleigh, Myrtle Beach I, and Myrtle Beach II).

⁽²⁾ As of September 30, 2018, this facility encumbers 21 properties (Xenia, Sidney, Troy, Greenville, Washington Court House, Richmond, Connersville, Vallejo, Port St. Lucie I, Sacramento, Sonoma, Las Vegas I, Las Vegas II, Las Vegas III, Baltimore, Aurora II, Plantation, Wellington, Naples, Port St. Lucie II, and Doral).

⁽³⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime, or the Canadian Dealer Offered Rate (“CDOR”).

⁽⁴⁾ This loan was assumed during the acquisition of the Oakland and Concord properties, along with an interest rate swap with USAmeriBank that fixes the interest rate at 3.95%.

⁽⁵⁾ This loan encumbers 29 properties (Whittier, La Verne, Santa Ana, Upland, La Habra, Monterey Park, Huntington Beach, Chico, Lancaster I, Riverside, Fairfield, Lompoc, Santa Rosa, Federal Heights, Aurora, Littleton, Bloomingdale, Crestwood, Forestville, Warren I, Sterling Heights, Troy, Warren II, Beverly, Everett, Foley, Tampa, Boynton Beach, and Lancaster II). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

⁽⁶⁾ This loan encumbers five properties (Pompano Beach, Lake Worth, Jupiter, Royal Palm Beach, and Delray). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

⁽⁷⁾ This variable rate loan encumbers 49% of the equity interest in the entities that own the 34 properties (the 29 properties encumbered by the KeyBank CMBS Loan and the five properties encumbered by the KeyBank Florida CMBS Loan), and is subordinate to the existing KeyBank CMBS Loan and KeyBank Florida CMBS Loan.

21

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

⁽⁸⁾ This loan encumbers 11 self storage properties (Asheville I, Arden, Asheville II, Hendersonville I, Asheville III, Asheville IV, Asheville V, Asheville VI, Asheville VII, Asheville VIII, and Hendersonville II) with monthly interest only payments until September 2019, at which time both interest and principal payments will be due monthly.

⁽⁹⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. These loans were assumed during the Toronto Merger, along with an interest rate swap with the Bank of Montreal that fixes the interest rate at 3.21%.

⁽¹⁰⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime.

⁽¹¹⁾ We have a $90 million interest rate cap on our variable rate LIBOR based debt that caps LIBOR at 1.25%. See Note 6.

⁽¹²⁾ Subsequent to September 30, 2018, these loans were paid off in full with the proceeds of a new, two year term loan with Citibank, N.A. See Note 12 for further discussion.

⁽¹³⁾ Subsequent to September 30, 2018, we amended and restated our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. See Note 12 for further discussion.

The weighted average interest rate on our consolidated debt as of September 30, 2018 was approximately 4.62%.

As of September 30, 2018, we provided recourse guarantees totaling approximately $42 million in connection with certain of our loans. We are subject to certain restrictive covenants relating to the outstanding debt.

Amended KeyBank Credit Facility

On December 22, 2015, we, through our Operating Partnership, and certain affiliated entities entered into an amended and restated revolving credit facility (the “Amended KeyBank Credit Facility”) with KeyBank National Association (“KeyBank”), as administrative agent and KeyBanc Capital Markets, LLC, as the sole book runner and sole lead arranger, and Texas Capital Bank, N.A., and Comerica Bank as co-lenders.

Under the terms of the Amended KeyBank Credit Facility, we initially had a maximum borrowing capacity of $105 million. The Amended KeyBank Credit Facility may be increased to a maximum credit facility size of $500 million, in minimum increments of $10 million, which KeyBank will arrange on a best efforts basis.

On February 18, 2016, we entered into a first amendment and joinder to the amended and restated credit agreement (the “First Amendment”) with KeyBank. Under the terms of the First Amendment, we added an additional $40 million to our maximum borrowing capacity for a total of $145 million with the admission of US Bank National Association (the “Subsequent Lender”). The Subsequent Lender also became a party to the Amended KeyBank Credit Facility through a joinder agreement in the First Amendment. As of September 30, 2018, we had approximately $89.2 million in borrowings outstanding under the Amended KeyBank Credit Facility.

The Amended KeyBank Credit Facility is a revolving loan with an initial term of three years, maturing on December 22, 2018, with two one-year extension options subject to certain conditions outlined further in the credit agreement for the Amended KeyBank Credit Facility (the “Amended Credit Agreement”). On October 29, 2018, we amended and restated our Amended KeyBank Credit Facility, extending the maturity date to February 20, 2019. See Note 12 - Subsequent Events. Payments due pursuant to the Amended KeyBank Credit Facility are interest-only for the first 36 months and a 30-year amortization schedule thereafter. The Amended KeyBank Credit Facility bears interest based on the type of borrowing. The ABR Loans bear interest at the lesser of (x) the Alternate Base Rate (as defined in the Amended Credit Agreement) plus the Applicable Rate, or (y) the Maximum Rate (as defined in the Amended Credit Agreement). The Eurodollar Loans bear interest at the lesser of (a) the Adjusted LIBO Rate (as defined in the Amended Credit Agreement) for the Interest Period in effect plus the Applicable Rate, or (b) the Maximum Rate (as defined in the Amended Credit Agreement). The Applicable Rate corresponds to our total leverage, as specified in the Amended Credit Agreement. For any ABR Loans, the Applicable Rate is 125 basis points if our total leverage is less than 50%, and 150 basis points if our leverage is greater than 50%. For any Eurodollar Loan, the Applicable Rate is 225 basis points if our total leverage is less than 50% and 250 basis points if our total leverage is greater than 50%.

22

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

The Amended KeyBank Credit Facility is fully recourse and is secured by cross-collateralized first mortgage liens on the mortgaged properties. The Amended KeyBank Credit Facility may be prepaid or terminated at any time without penalty, provided, however, that the Lenders (as defined in the Amended Credit Agreement) shall be indemnified for any breakage costs. Pursuant to that certain guaranty (the “KeyBank Guaranty”), dated December 22, 2015, in favor of the Lenders, we serve as a guarantor of all obligations due under the Amended KeyBank Credit Facility.

Under certain conditions, the Borrower may cause the release of one or more of the properties serving as collateral for the Amended KeyBank Credit Facility, provided that no default or event of default is then outstanding or would reasonably occur as a result of such release, and after taking into account any prepayment of outstanding Loans (as defined in the Amended Credit Agreement) necessary to maintain compliance with the financial covenants.

The Amended KeyBank Credit Facility contains a number of other customary terms and covenants, including the following (capitalized terms are as defined in the Amended Credit Agreement): the aggregate borrowing base availability under the Amended KeyBank Facility is limited to the lesser of: (1) 60% of the Pool Value of the properties in the collateral pool, or (2) an amount that would provide a minimum Debt Service Coverage Ratio of no less than 1.35 to 1.0; and we must meet the following financial tests, calculated as of the close of each fiscal quarter: (1) a Total Leverage Ratio of no more than 60%; (2) a Tangible Net Worth not at any time to be less than the Base Amount plus 80% of Net Equity Proceeds received after the Effective Date; (3) an Interest Coverage Ratio of no less than 1.85 to 1.0; (4) a Fixed Charge Ratio of no less than 1.6 to 1.0; (5) a ratio of varying rate Indebtedness to total Indebtedness not in excess of 30%; (6) a Loan to Value Ratio of not greater than 60%; and (7) a Debt Service Coverage Ratio of not less than 1.35 to 1.0. As of September 30, 2018, we were in compliance with all such covenants.

During 2017, our Operating Partnership purchased an interest rate cap with a notional amount of $90 million, with an effective date of July 1, 2017 that caps LIBOR at 1.25% through December 22, 2018.

The following table presents the future principal payment requirements on outstanding debt as of September 30, 2018:

2018	$	122,872,859		(1)
2019		26,139,333		(1)
2020		12,622,834		(1)
2021		13,684,085		(1)
2022		3,635,428
2023 and thereafter		217,722,414
Total payments		396,676,953
Premium on secured debt, net		1,305,598
Debt issuance costs, net		(2,073,373	)
Total	$	395,909,178

⁽¹⁾ On October 11, 2018, we repaid approximately $70.7 million of our Canadian debt with the proceeds from a new loan with Citibank. On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. Subsequent to these debt transactions, future principal payment requirements on our outstanding debt for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter are approximately $0.2 million, $90.1 million, $83.1 million, $2.0 million, $3.6 million, and $217.7 million, respectively.  See Note 12 – Subsequent Events.

Note 6. Derivative Instruments

Interest Rate Derivatives

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we use interest rate swaps and caps as part of our interest rate risk management strategy. The effective portion of the change in the fair value of the derivative that qualifies as a cash flow hedge is recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt.

23

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

We do not use derivatives for trading or speculative purposes.  Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks but we have elected not to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded in other income (expense) as income within our consolidated statements of operations and were approximately none and $20,000 for the three and nine months ended September 30, 2018, respectively.

Foreign Currency Forward

Our objectives in using foreign currency derivatives are to add stability to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar and to manage our exposure to exchange rate movements. To accomplish this objective, we use foreign currency forwards as part of our exchange rate risk management strategy. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into the forward contract and holding it to maturity, we are locked into a future currency exchange rate in an amount equal to and for the term of the forward contract. For derivatives designated as net investment hedges, the changes in the fair value of the derivatives are reported in accumulated other comprehensive income. Amounts are reclassified out of accumulated other comprehensive income into earnings when the hedged net investment is either sold or substantially liquidated.  

The following table summarizes the terms of our derivative financial instruments as of September 30, 2018:

	Notional Amount			Strike			EffectiveDate or Date Assumed	MaturityDate
Interest Rate Swaps:
Oakland and Concord loan	$	19,604,712			3.95	%	May 18, 2016	April 10, 2023
Dufferin loan		13,607,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Mavis loan		11,469,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Brewster loan		7,496,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Interest Rate Cap:
LIBOR	$	90,000,000			1.25	%	July 1, 2017	December 22, 2018
Foreign Currency Forward:
Denominated in CAD	$	90,000,000	(1)		1.2846		March 28, 2018	January 28, 2019

⁽¹⁾ Notional amounts shown are denominated in CAD. These swaps were settled on October 11, 2018 in conjunction with the Canadian debt refinancing. See Note 12.  

On February 1, 2017, to hedge our net investment related to the Toronto Merger, we entered into a foreign currency forward contract with a notional amount of $58.5 million CAD, and a forward rate of approximately 1.3058. During the quarter ended March 31, 2017, we settled our two foreign currency forward contracts which resulted in us receiving a net settlement of approximately $1.4 million, and simultaneously entered into a third foreign currency forward contract with a notional amount of $101 million CAD, and a forward rate of approximately 1.3439. During the quarter ended September 30, 2017, we settled our third foreign currency forward contract, which resulted in us paying a net settlement of approximately $5.5 million, and simultaneously entered into a fourth foreign currency forward contract with a notional amount of $101 million CAD, and a forward rate of approximately 1.2526. The fourth foreign currency forward was settled on March 28, 2018 and resulted in us receiving a net settlement of approximately $2.2 million. We simultaneously entered into our fifth foreign currency forward as noted in the table above. A portion of our gain (loss) from our settled hedges is recorded net in foreign currency forward contract gain (loss) in our consolidated statements of comprehensive loss, and a gain of approximately none and $65,000 related to the ineffective portion is recorded in other income (expense) within our consolidated statements of operations for the three and nine months ended September 30, 2018, respectively.

24

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

The following table summarizes the terms of our derivative financial instruments as of December 31, 2017:

	Notional Amount			Strike			EffectiveDateor DateAssumed	MaturityDate
Interest Rate Swaps:
Oakland and Concord loan	$	19,960,190			3.95	%	May 18, 2016	April 10, 2023
Dufferin loan		14,025,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Mavis loan		11,821,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Brewster loan		7,726,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Interest Rate Cap:
LIBOR	$	90,000,000			1.25	%	July 1, 2017	December 22, 2018
Foreign Currency Forward:
Denominated in CAD	$	101,000,000	(1)		1.2526		August 31, 2017	March 29, 2018

⁽¹⁾ Notional amount shown is denominated in CAD.  

The following table presents a gross presentation of the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets as of September 30, 2018 and December 31, 2017.

	Asset/Liability Derivatives
	Fair Value
Balance Sheet Location	September 30, 2018		December 31,  2017
Interest Rate Swaps
Other assets	$	920,928	$	455,526
Accounts payable and accrued liabilities		—		6,320
Interest Rate Cap
Other assets		214,853		472,501
Foreign Currency Forward
Accounts payable and accrued liabilities		—		67,092
Other assets		231,549		—

Note 7. Related Party Transactions

Fees to Affiliates

Our Advisory Agreement with our Advisor, our dealer manager agreement, as amended ("Dealer Manager Agreement") with our Dealer Manager, our Property Management Agreement with our Property Manager and our Transfer Agent Agreement with our Transfer Agent entitle such affiliates to specified fees upon the provision of certain services with regard to the Offering and investment of funds in real estate properties, among other services, as well as certain reimbursements, as described below.

Advisory Agreement

We do not have any employees. Our Advisor is primarily responsible for managing our business affairs and carrying out the directives of our board of directors. Our Advisor receives various fees and expenses under the terms of our Advisory Agreement.

Our Advisor receives acquisition fees equal to 1.75% of the contract purchase price of each property we acquire plus reimbursement of any acquisition expenses incurred by our Advisor. Our Advisor also receives a monthly asset management fee equal to 0.05208%, which is one-twelfth of 0.625%, of our aggregate asset value, as defined in the Advisory Agreement.

25

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Under our Advisory Agreement, our Advisor receives disposition fees in an amount equal to the lesser of (i) one-half of the competitive real estate commission or (ii) 1% of the contract sale price for each property we sell, as long as our Advisor provides substantial assistance in connection with the sale. The total real estate commissions paid (including the disposition fee paid to our Advisor) may not exceed the lesser of a competitive real estate commission or an amount equal to 6% of the contract sale price of the property.

Our Advisor is also entitled to various subordinated distributions pursuant to our Operating Partnership Agreement if we (1) list our shares of common stock on a national exchange, (2) terminate our Advisory Agreement (other than a voluntary termination), (3) liquidate our portfolio, or (4) enter into an Extraordinary Transaction, as defined in the Operating Partnership Agreement.

Our Advisory Agreement provides for reimbursement of our Advisor’s direct and indirect costs of providing administrative and management services to us. Pursuant to the Advisory Agreement, our Advisor is obligated to pay or reimburse us the amount by which our aggregate annual operating expenses, as defined, exceed the greater of 2% of our average invested assets or 25% of our net income, as defined, unless a majority of our independent directors determine that such excess expenses were justified based on unusual and non-recurring factors. For any fiscal quarter for which total operating expenses for the 12 months then ended exceed the limitation, we will disclose this fact in our next quarterly report or within 60 days of the end of that quarter and send a written disclosure of this fact to our stockholders. In each case the disclosure will include an explanation of the factors that the independent directors considered in arriving at the conclusion that the excess expenses were justified. Our aggregate annual operating expenses, as defined, did not exceed the thresholds described above.

Dealer Manager Agreement

In connection with our Primary Offering, our Dealer Manager received a sales commission of up to 7.0% of gross proceeds from sales of Class A Shares and up to 2.0% of gross proceeds from the sales of Class T Shares in the Primary Offering and a dealer manager fee up to 3.0% of gross proceeds from sales of both Class A Shares and Class T Shares in the Primary Offering under the terms of the Dealer Manager Agreement. In addition, our Dealer Manager receives an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering. We will cease paying the stockholder servicing fee with respect to the Class T Shares sold in the Primary Offering at the earlier of (i) the date we list our shares on a national securities exchange, merge or consolidate with or into another entity, or sell or dispose of all or substantially all of our assets, (ii) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of both Class A Shares and Class T Shares in our Primary Offering (i.e., excluding proceeds from sales pursuant to our distribution reinvestment plan), which calculation shall be made by us with the assistance of our Dealer Manager commencing after the termination of the Primary Offering; (iii) the fifth anniversary of the last day of the fiscal quarter in which our Primary Offering (i.e., excluding our distribution reinvestment plan offering) terminated; and (iv) the date that such Class T Share is redeemed or is no longer outstanding. Our Dealer Manager entered into participating dealer agreements with certain other broker-dealers which authorized them to sell our shares. Upon sale of our shares by such broker-dealers, our Dealer Manager re-allowed all of the sales commissions and, subject to certain limitations, the stockholder servicing fees paid in connection with sales made by these broker-dealers. Our Dealer Manager could also re-allow to these broker-dealers a portion of their dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by our Dealer Manager, payment of attendance fees required for employees of our Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. Our Dealer Manager also received reimbursement of bona fide due diligence expenses; however, to the extent these due diligence expenses could not be justified, any excess over actual due diligence expenses would have been considered underwriting compensation subject to a 10% FINRA limitation and, when aggregated with all other non-accountable expenses in connection with our Offering, could not exceed 3% of gross offering proceeds from sales in the Offering.

Affiliated Dealer Manager

Our Sponsor owns a 15% non-voting equity interest in our Dealer Manager. Affiliates of our Dealer Manager own a 2.5% non-voting membership interest in our Advisor.

26

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Transfer Agent Agreement

Our Sponsor is the owner and manager of our Transfer Agent, which is a registered transfer agent with the SEC. Effective in June 2018, our Transfer Agent provides transfer agent and registrar services to our stockholders. These services include, among other things, processing payment of any sales commission and dealer manager fees associated with a particular purchase, as well as processing the distributions and any servicing fees with respect to our shares. Additionally, our Transfer Agent may retain and supervise third party vendors in its efforts to administer certain services. We believe that our Transfer Agent, through its knowledge and understanding of the direct participation program industry which includes non-traded REITs, is particularly suited to provide us with transfer agent and registrar services. Our Transfer Agent also conducts transfer agent and registrar services for other non-traded REITs sponsored by our Sponsor.

It is the duty of our board of directors to evaluate the performance of our Transfer Agent. In connection with the engagement of our Transfer Agent, we paid a one-time initial setup fee of $50,000. In addition, the other fees to be paid to our Transfer Agent are based on a fixed quarterly fee, one-time account setup fees and monthly open account fees. In addition, we will reimburse our Transfer Agent for all reasonable expenses or other changes incurred by it in connection with the provision of its services to us, and we will pay our Transfer Agent fees for any additional services we may request from time to time, in accordance with its rates then in effect. Upon the request of our Transfer Agent, we may also advance payment for substantial reasonable out-of-pocket expenditures to be incurred by it.

The initial term of the transfer agent agreement is three years, which term will be automatically renewed for one year successive terms, but either party may terminate the transfer agent agreement upon 90 days’ prior written notice. In the event that we terminate the transfer agent agreement, other than for cause, we will pay our transfer agent all amounts that would have otherwise accrued during the remaining term of the transfer agent agreement; provided, however, that when calculating the remaining months in the term for such purposes, such term is deemed to be a 12 month period starting from the date of the most recent annual anniversary date.

Property Management Agreement

Since inception, our Property Manager has served as the property manager for each of our properties pursuant to separate property management agreements. From October 1, 2015 through September 30, 2017, our Property Manager contracted with Extra Space for Extra Space to serve as the sub-property manager for each of our properties located in the United States pursuant to separate sub-property management agreements for each property. Effective October 1, 2017, our Property Manager terminated its sub-property management agreements with Extra Space. Our Property Manager now manages all of our properties directly. In connection with these terminations, each property management agreement that was subject to a sub-property management agreement with Extra Space was amended and, where applicable, we paid Extra Space a termination fee, as described below.

Prior Arrangement

Under the property management agreements in effect from October 1, 2015 through September 30, 2017 for our properties located in the United States, our Property Manager received a monthly management fee for each property equal to the greater of $2,500 or 6% of the gross revenues, plus reimbursement of our Property Manager’s costs of managing the properties. In addition, Extra Space agreed to pay up to $25,000 per property toward the signage and set-up costs associated with converting such property to the Extra Space brand (the “Set-Up Amount”). The property management agreements had a three year term and automatically renewed for successive one year periods thereafter, unless we or our Property Manager provided prior written notice at least 90 days prior to the expiration of the term. In general, if we terminated a property management agreement without cause during the initial three year term, we would have been required to pay our Property Manager a termination fee equal to the Set-Up Amount, reduced by 1/36th of the Set-Up Amount for every full month of the term that had elapsed. After the end of the initial three year term, we could have terminated a property management agreement on 30 days prior written notice without payment of a termination fee. Our Property Manager could have terminated a property management agreement on 60 days prior written notice to us.

27

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

The sub-property management agreements between our Property Manager and Extra Space were substantially the same as the foregoing property management agreements. Under the sub-property management agreements, our Property Manager paid Extra Space a monthly management fee for each property equal to the greater of $2,500 or 6% of the gross revenues, plus reimbursement of Extra Space’s costs of managing the properties; provided, however that no management fee was due and payable to Extra Space for the months of January and July each year during the term. Extra Space had the exclusive right to offer tenant insurance to the tenants and was entitled to all of the benefits of such tenant insurance. The sub-property management agreements also had a three year term and automatically renewed for successive one year periods thereafter, unless our Property Manager or Extra Space provided prior written notice at least 90 days prior to the expiration of the term. In general, if our Property Manager terminated a sub-property management agreement without cause during the initial three year term, it would have been required to pay Extra Space a termination fee equal to the Set-Up Amount, reduced by 1/36th of the Set-Up Amount for every full month of the term that had elapsed. After the end of the initial three year term, our Property Manager could have terminated a sub-property management agreement on 30 days prior written notice without payment of a termination fee. Extra Space could have terminated a sub-property management agreement on 60 days prior written notice to our Property Manager.

Termination of Sub-property Manager

As of October 1, 2017, our Property Manager terminated each sub-property management agreement with Extra Space, and we amended each of our corresponding property management agreements as described below. To the extent a termination fee would have been owed by any of our property-owning subsidiaries had its corresponding property management agreement with our Property Manager been terminated, each such property-owning subsidiary agreed to pay the termination fee owed by our Property Manager in accordance with its termination of the sub-property management agreements. The aggregate costs incurred in connection with the property management changes were approximately $0.8 million. This amount was included in property operating expenses – affiliates in the consolidated statements of operations for the year ended December 31, 2017.

Property Management Subsequent to September 30, 2017

In connection with the termination of each sub-property management agreement, each corresponding property management agreement was amended effective as of October 1, 2017. Pursuant to the amended property management agreements, our Property Manager receives: (i) a monthly management fee for each property equal to the greater of $3,000 or 6% of the gross revenues from the properties plus reimbursement of the Property Manager’s costs of managing the properties and (ii) a construction management fee equal to 5% of the cost of construction or capital improvement work in excess of $10,000. In addition, we have agreed with our Property Manager or an affiliate to share equally in the net revenue attributable to the sale of tenant insurance at our properties. The property management agreements have a three year term and automatically renew for successive three year periods thereafter, unless we or our Property Manager provide prior written notice at least 90 days prior to the expiration of the term. After the end of the initial three year term, either party may terminate a property management agreement generally upon 60 days prior written notice. With respect to each new property we acquire for which we enter into a property management agreement with our Property Manager we will also pay our Property Manager a one-time start-up fee in the amount of $3,750.

In connection with the change in our property management operations, each of our stores in the United States were rebranded under the “SmartStop® Self Storage” brand.

Our self storage properties located in Canada are subject to separate property management agreements with our Property Manager on terms substantially the same as the amended property management agreements described above.All properties owned or acquired in Canada are managed by a subsidiary of our Sponsor and branded using the SmartStop® Self Storage brand.

28

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Pursuant to the terms of the agreements described above, the following table summarizes related party costs incurred and paid by us for the year ended December 31, 2017 and the nine months ended September 30, 2018, as well as any related amounts payable as of December 31, 2017 and September 30, 2018:

	Year Ended December 31, 2017						Nine Months Ended September 30,2018
	Incurred		Paid		Payable		Incurred		Paid		Payable
Expensed
Operating expenses (including    organizational costs)	$	1,090,366	$	751,010	$	345,864	$	1,678,975	$	1,558,164	$	466,675
Transfer Agent fees		—		—		—		197,182		189,607		7,575
Asset management fees		5,346,280		5,346,280		—		4,085,859		4,001,045		84,814
Property management fees(1)		5,285,082		5,285,082		—		3,601,324		3,510,257		91,067
Acquisition expenses		212,577		212,577		—		42,642		42,642		—
Capitalized
Acquisition costs		—		—		—		48,664		48,664		—
Additional Paid-in Capital
Selling commissions		966,516		966,516		—		—		—		—
Dealer Manager fee		353,167		513,881		—		—		—		—
Stockholder servicing fee(2)		299,299		690,272		2,620,040		—		507,910		2,112,130
Offering costs		33,466		33,466		—		—		—		—
Total	$	13,586,753	$	13,799,084	$	2,965,904	$	9,654,646	$	9,858,289	$	2,762,261

⁽¹⁾ During the nine months ended September 30, 2018 and year ended December 31, 2017, property management fees included $0 and approximately $3.2 million, respectively, of fees paid to the sub-property manager of our properties. This includes the costs incurred related to the change in property management of approximately $0.8 million during 2017.

⁽²⁾ We pay our Dealer Manager an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365^th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering.

Extra Space Self Storage

In connection with the Extra Space Merger of SmartStop Self Storage, Inc. into Extra Space, certain of our executive officers, including H. Michael Schwartz, Paula Mathews, Michael McClure and James Berg, received units of limited partnership interest in Extra Space Storage LP, the operating partnership for Extra Space, in exchange for units of limited partnership of SmartStop Self Storage Operating Partnership, L.P., the operating partnership for SmartStop, owned by such executives.

Tenant Insurance

We offer a tenant insurance plan to customers at our properties. In connection with the property management agreement amendments effective as of October 1, 2017, we agreed with our Property Manager or an affiliate to share equally in the net revenue attributable to the sale of tenant insurance at our properties. To facilitate such revenue sharing, we and an affiliate of our Property Manager agreed to transfer our respective rights in such tenant insurance revenue to a newly created joint venture in March of 2018, Strategic Storage TI Services II JV, LLC (the “TI Joint Venture”), a Delaware limited liability company owned 50% by our TRS subsidiary and 50% by our Property Manager’s affiliate SmartStop TI II, LLC (“SS TI II”).  Under the terms of the TI Joint Venture agreement, the TRS receives 50% of the net economics generated from such tenant insurance and SS TI II receives the other 50% of such net economics.  The TI Joint Venture further provides, among other things, that if a member or its affiliate terminates all or substantially all of the property management agreements or defaults in its material obligations under the agreement or undergoes a change of control, as defined, (the “Triggering Member”), the other member generally shall have the right (but not the obligation) to either (i) sell its 50% interest in the TI Joint Venture to the Triggering Member at fair market value (as agreed upon or as determined under an appraisal process) or (ii) purchase the Triggering Member’s 50% interest in the TI Joint Venture at 95% of fair market value. For the three and

29

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

nine months ended September 30, 2018 we recorded revenues of approximately $0.4 million and $1.1 million, respectively, related to tenant insurance which was included in ancillary operating revenue in the consolidated statements of operations.

Storage Auction Program

Our Sponsor owns a minority interest in a company that owns 50% of an online auction company (the “Auction Company”) that serves as a web portal for self storage companies to post their auctions for the contents of abandoned storage units online instead of using live auctions conducted at the self storage facilities. The Auction Company receives a service fee for such services. Through December 31, 2017, neither our Property Manager nor our sub-property manager utilized the Auction Company at our properties. During the three and nine months ended September 30, 2018, we paid approximately $15,000 and $30,000, respectively, in fees to the Auction Company related to our properties. Our properties receive the proceeds from such online auctions.

Toronto Merger

On February 1, 2017, we entered into a definitive Agreement and Plan of Merger (the “Toronto Merger Agreement”) pursuant to which SST II Toronto Acquisition, LLC, a wholly owned and newly formed subsidiary of our Operating Partnership, merged (the “Toronto Merger”) with and into SS Toronto, a subsidiary of our Sponsor, with SS Toronto surviving the Toronto Merger and becoming a wholly owned subsidiary of our Operating Partnership. In connection with the Toronto Merger, we acquired five self storage properties located in the Greater Toronto Areas of North York, Mississauga, Brampton, Pickering and Scarborough (the “SS Toronto Properties”). Each property is operated under the “SmartStop” brand.

At the effective time of the Toronto Merger, each share of common stock, $0.001 par value per share, of SS Toronto issued and outstanding was automatically converted into the right to receive $11.0651 USD in cash and 0.7311 Class A Units of our Operating Partnership. We paid an aggregate of approximately $7.3 million USD in cash consideration and issued an aggregate of approximately 483,197 Class A Units of our Operating Partnership to the common stockholders of SS Toronto, consisting of Strategic 1031 and SS Toronto REIT Advisors, Inc., affiliates of our Sponsor. We acquired the SS Toronto Properties subject to approximately $50.1 million CAD (approximately $38.4 million USD) in outstanding debt (as described further below), approximately $0.8 million in other net liabilities, and paid approximately $33.1 million USD to an affiliate of Extra Space as repayment of outstanding debt and accrued interest owed by SS Toronto. No acquisition fee was paid to our Advisor for the Toronto Merger.

The terms of the Toronto Merger and the execution of the Toronto Merger Agreement were recommended by a special committee (the “Special Committee”) of our board of directors consisting of the Nominating and Corporate Governance Committee, the members of which were all of our independent directors. The Special Committee, with the assistance of its independent financial advisor and independent legal counsel, approved the transaction and determined that the Toronto Merger and the other transactions contemplated by the Toronto Merger Agreement were advisable and in the best interests of us, were fair and reasonable to us and were on terms and conditions not less favorable to us than those available from unaffiliated third parties.

In connection with the Toronto Merger, we entered into guarantees, dated as of February 1, 2017 (the “Guarantees”), under which we agreed to guarantee certain obligations of SS Toronto. The SS Toronto loans consist of (i) term loans totaling approximately $34.8 million CAD pursuant to promissory notes executed by SS Toronto in favor of Bank of Montreal on June 3, 2016, and (ii) mortgage financings in the aggregate amount of up to $17.7 million CAD pursuant to two promissory notes executed by subsidiaries of SS Toronto in favor of DUCA Financial Services Credit Union Ltd. on June 3, 2016.

Note 8. Commitments and Contingencies

Distribution Reinvestment Plan

We have adopted an amended and restated distribution reinvestment plan that allows both our Class A and Class T stockholders to have distributions otherwise distributable to them invested in additional shares of our Class A and Class T Shares, respectively. The purchase price per share pursuant to our distribution reinvestment plan is equivalent to the estimated value per share approved by our board of directors and in effect on the date of purchase of shares under the plan. In

30

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

conjunction with the board of directors’ declaration of a new estimated value per share of our common stock on April 19, 2018, beginning in May 2018, shares sold pursuant to our distribution reinvestment plan are sold at the new estimated value per share of $10.65 per Class A Share and Class T Share. On November 30, 2016, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $100.9 million in shares under our distribution reinvestment plan (our “DRP Offering”).  We may amend or terminate the amended and restated distribution reinvestment plan for any reason at any time upon 10 days’ prior written notice to stockholders. No sales commissions, dealer manager fee, or stockholder servicing fee will be paid on shares sold through the amended and restated distribution reinvestment plan. Through the termination of our Offering on January 9, 2017, we had sold approximately 1.1 million Class A shares and 0.1 million Class T Shares through our original distribution reinvestment plan. As of September 30, 2018, we had sold approximately 2.4 million Class A Shares and approximately 0.4 million Class T Shares through our DRP Offering.

Share Redemption Program

We adopted a share redemption program that enables stockholders to sell their shares to us in limited circumstances. As long as our common stock is not listed on a national securities exchange or over-the-counter market, our stockholders who have held their stock for at least one year may be able to have all or any portion of their shares of stock redeemed by us. We may redeem the shares of stock presented for redemption for cash to the extent that we have sufficient funds available to fund such redemption.

Our board of directors may amend, suspend or terminate the share redemption program with 30 days’ notice to our stockholders. We may provide this notice by including such information in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to our stockholders. The complete terms of our share redemption program are described in our prospectus.

The amount that we may pay to redeem stock for redemptions is the redemption price set forth in the following table which is based upon the number of years the stock is held:

Number Years Held	Redemption Price
Less than 1	No Redemption Allowed
1 or more but less than 3	90.0% of Redemption Amount
3 or more but less than 4	95.0% of Redemption Amount
4 or more	100.0% of Redemption Amount

At any time we are engaged in an offering of shares, the Redemption Amount for shares purchased under our share redemption program will always be equal to or lower than the applicable per share offering price. As long as we are engaged in an offering, the Redemption Amount shall be the lesser of the amount the stockholder paid for their shares or the price per share in the current offering. If we are no longer engaged in an offering, our board of directors will announce any redemption price adjustment and the time period of its effectiveness as a part of its regular communications with our stockholders. At any time the redemption price during an offering is determined by any method other than the offering price, if we have sold property and have made one or more special distributions to our stockholders of all or a portion of the net proceeds from such sales, the per share redemption price will be reduced by the net sale proceeds per share distributed to investors prior to the redemption date as a result of the sale of such property in the special distribution. Our board of directors will, in its sole discretion, determine which distributions, if any, constitute a special distribution. While our board of directors does not have specific criteria for determining a special distribution, we expect that a special distribution will only occur upon the sale of a property and the subsequent distribution of the net sale proceeds.

There are several limitations on our ability to redeem shares under the share redemption program including, but not limited to:

• Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” (as defined under the share redemption program) or bankruptcy, we may not redeem shares until the stockholder has held his or her shares for one year.

• During any calendar year, we will not redeem in excess of 5% of the weighted-average number of shares outstanding during the prior calendar year.

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STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

• The cash available for redemption is limited to the proceeds from the sale of shares pursuant to our distribution reinvestment plan, less any prior redemptions.

• We have no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

For the year ended December 31, 2017, we received redemption requests totaling approximately $2.2 million (approximately 0.2 million shares), approximately $1.5 million of which were fulfilled during the year ended December 31, 2017, with the remaining approximately $0.7 million included in accounts payable and accrued liabilities as of December 31, 2017 and fulfilled in January 2018.  For the nine months ended September 30, 2018, we received redemption requests totaling approximately $7.0 million (approximately 0.7 million shares), $2.3 million of which were fulfilled in April and July 2018, and $4.6 million of which were included in accounts payable and accrued liabilities as of September 30, 2018 and fulfilled in October 2018.

Operating Partnership Redemption Rights

The limited partners of our Operating Partnership have the right to cause our Operating Partnership to redeem their limited partnership units for cash equal to the value of an equivalent number of our shares, or, at our option, we may purchase their limited partnership units by issuing one share of our common stock for each limited partnership unit redeemed. These rights may not be exercised under certain circumstances that could cause us to lose our REIT election. Furthermore, limited partners may exercise their redemption rights only after their limited partnership units have been outstanding for one year. Our Advisor is prohibited from exchanging or otherwise transferring its limited partnership units so long as our Advisor is acting as our advisor under the Advisory Agreement.

Other Contingencies

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. We are not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.

Note 9. Declaration of Distributions

On September 20, 2018, our board of directors declared a distribution rate for the fourth quarter of 2018 of approximately $0.001644 per day per share on the outstanding shares of common stock payable to both Class A and Class T stockholders of record of such shares as shown on our books at the close of business on each day during the period, commencing on October 1, 2018 and continuing on each day thereafter through and including December 31, 2018. In connection with this distribution, after the stockholder servicing fee is paid, approximately $0.0014 per day will be paid per Class T share. Such distributions payable to each stockholder of record during a month will be paid the following month.

Note 10. Selected Quarterly Data

The following is a summary of quarterly financial information for the periods shown below:

	Three months ended
	September 30, 2017			December 31, 2017			March 31, 2018			June 30, 2018			September 30, 2018
Total revenues	$	19,939,512		$	19,385,071		$	19,866,457		$	20,045,516		$	20,313,069
Total operating expenses	$	19,197,777		$	16,991,318		$	16,010,116		$	16,605,713		$	15,836,436
Operating income	$	741,735		$	2,393,753		$	3,856,341		$	3,439,803		$	4,476,633
Net loss	$	(3,875,164	)	$	(2,351,155	)	$	(667,047	)	$	(1,437,330	)	$	(457,278	)
Net loss attributable to common stockholders	$	(3,840,775	)	$	(2,329,515	)	$	(661,203	)	$	(1,427,056	)	$	(451,424	)
Net loss per Class A Share-basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.01	)	$	(0.02	)	$	(0.01	)
Net loss per Class T Share-basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.01	)	$	(0.02	)	$	(0.01	)

32

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Note 11. Potential Merger

On October 1, 2018, we, our Operating Partnership, Merger Sub, SSGT, and SSGT OP entered into the Merger Agreement in connection with the Mergers.

Subject to SSGT’s rights in connection with the go-shop provision described in further detail below, and pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the REIT Merger (the “REIT Merger Effective Time”), each share of SSGT common stock outstanding immediately prior to the REIT Merger Effective Time (other than shares owned by SSGT and its subsidiaries or us and our subsidiaries) will be automatically converted into the right to receive an amount in cash equal to $12.00, without interest and less any applicable withholding taxes (the “Merger Consideration”), which represents a total purchase price of approximately $340 million (which includes outstanding debt to be assumed or repaid as of September 30, 2018 but excludes transaction costs). Immediately prior to the REIT Merger Effective Time, all shares of SSGT common stock that are subject to vesting and other restrictions will become fully vested and non-forfeitable and, at the REIT Merger Effective Time, will be converted into the right to receive the Merger Consideration. At the effective time of the Partnership Merger, each outstanding unit of partnership interest in SSGT OP will be converted automatically into 1.127 units of partnership interest in our Operating Partnership. We are in the process of negotiating new loans in order to finance the Mergers, which would include the financing of the SSGT properties, the refinancing of certain of our existing properties and the payoff of certain of our existing loans.

Assuming all of the conditions to the Mergers are satisfied and the Mergers are consummated in accordance with the terms in the Merger Agreement, we will acquire all of the real estate owned by SSGT, consisting of 28 self storage facilities located in 10 states and in the Greater Toronto, Canada area, and comprising approximately 19,300 self storage units and approximately 2.1 million net rentable square feet of storage space.  Additionally, we will obtain the rights to acquire two self storage facilities currently under contract with SSGT.

The Merger Agreement contains customary representations, warranties and covenants. The closing of the REIT Merger is subject to the approval of the REIT Merger by the affirmative vote of the holders of a majority of all outstanding shares of SSGT’s common stock as of the record date for the special meeting of SSGT’s stockholders. The closing of the Mergers is also subject to various customary conditions. The closing of the REIT Merger is neither subject to a financing condition nor to the approval of our stockholders.

The Merger Agreement prohibits SSGT and its subsidiaries and representatives from soliciting, providing information or entering into discussions concerning proposals relating to alternative business combination transactions, subject to certain limited exceptions. However, under the terms of the Merger Agreement, during the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. New York City time on November 15, 2018 (the “Go Shop Period End Time”), SSGT (through the special committee of SSGT’s board of directors and its representatives) may initiate, solicit, provide information and enter into discussions concerning proposals relating to alternative business combination transactions. For up to five business days after the Go Shop Period End Time, SSGT may continue to participate in such discussions with a Go Shop Bidder (as defined in the Merger Agreement) and may, subject to certain conditions set forth in the Merger Agreement regarding the proposal made by such Go Shop Bidder, terminate the Merger Agreement and enter into an agreement with a Go Shop Bidder with respect to the proposal made by such Go Shop Bidder. The Merger Agreement also provides that, at any time beginning on the sixth business day after the Go Shop Period End Time and prior to receipt of the approval of SSGT’s stockholders, SSGT’s board of directors may, in certain circumstances, make an Adverse Recommendation Change (as such term is defined in the Merger Agreement) and terminate the Merger Agreement, subject to complying with certain conditions set forth in the Merger Agreement.

In connection with the termination of the Merger Agreement and SSGT’s entry into an alternative transaction with respect to a superior proposal, as well as under other specified circumstances, SSGT will be required to pay us a termination fee of $2.9 million in the event of termination on or prior to the fifth business day following the Go Shop Period End Time, or $9.6 million in the event of termination thereafter. In addition, the Merger Agreement provides for customary expense reimbursement under specified circumstances set forth in the Merger Agreement. The Merger Agreement also provides that we will be required to pay SSGT a reverse termination fee of $9.6 million under specified circumstances set forth in the Merger Agreement related to our failure to consummate the Closing.

33

STRATEGIC STORAGE TRUST II, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

We expect the SSGT stockholders meeting to occur in the first quarter of 2019 and, if the REIT Merger is approved by the SSGT stockholders, we expect the Mergers to close shortly thereafter.  However, there is no guarantee that the Mergers will be consummated.

Note 12. Subsequent Events

Distribution Reinvestment Plan Offering

As of November 12, 2018, we have issued approximately 2.5 million Class A shares of our common stock and approximately 0.4 million Class T Shares of our common stock for gross proceeds of approximately $25.5 million and approximately $3.9 million, pursuant to our DRP Offering.

Canadian Debt Refinancing

On October 11, 2018, we, through 10 special purpose entities owned by our Operating Partnership, entered into a loan agreement (the “Canadian Citibank Loan Agreement”) with Citibank, N.A. (“Citibank”), as lender. Under the terms of the Canadian Citibank Loan Agreement, we have a maximum borrowing capacity of $112 million CAD, of which we immediately borrowed $99.3 million CAD (the “Initial Proceeds”). The Initial Proceeds were primarily used to pay off all of the existing loans encumbering our properties located in the greater Toronto, Canada metropolitan area, all of which now serve as collateral under the Canadian Citibank Loan Agreement. We also have the right to receive future advances in the aggregate amount of up to $12.7 million CAD, subject to certain conditions as set forth in the loan agreement.

The Canadian Citibank Loan Agreement is a term loan that has a maturity date of October 9, 2020, which may, in certain circumstances, be extended at our option for three consecutive terms of one year each. Monthly payments are interest-only, with the full principal amount becoming due and payable on the maturity date. In general, the amounts outstanding bear interest at a rate equal to the sum of the “CDOR” (as defined in the Loan Agreement) and 2.25%. As of October 11, 2018, the interest rate was approximately 4.1%. In addition, pursuant to the requirements of the Canadian Citibank Loan Agreement, the Borrower purchased an interest rate cap with a notional amount of $99.3 million, with an effective date of October 11, 2018, whereby the CDOR is capped at 3.00% through October 15, 2021.

Extension of Amended KeyBank Credit Facility

On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date from December 22, 2018 to February 20, 2019 in order to facilitate financing for the potential merger with SSGT. Pursuant to this amendment, we also reduced the maximum borrowing capacity from $145 million to $110 million. We are in the process of negotiating new loans in order to finance the Mergers, which would include the financing of the SSGT properties, the refinancing of certain of our existing properties and the payoff of certain of our existing loans including the Amended KeyBank Credit Facility.

34

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this report. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should also be read in conjunction with our financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2017. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I.

Overview

Strategic Storage Trust II, Inc., a Maryland corporation (the “Company”), was formed on January 8, 2013 under the Maryland General Corporation Law for the purpose of engaging in the business of investing in self storage facilities and related self storage real estate investments. Our year-end is December 31. As used in this report, “we,” “us,” “our,” and “Company” refer to Strategic Storage Trust II, Inc. and each of our subsidiaries.

SmartStop Asset Management, LLC (our “Sponsor”), is the sponsor of our Offering (as defined below). Our Sponsor owns 97.5% of the economic interests (and 100% of the voting membership interests) of Strategic Storage Advisor II, LLC, a Delaware limited liability company (our “Advisor”), and owns 100% of Strategic Storage Property Management II, LLC, a Delaware limited liability company (our “Property Manager”). See Note 1 of the Notes to the Consolidated Financial Statements contained in this report for further details about our affiliates.

On January 10, 2014, we commenced a public offering of a maximum of $1.0 billion in common shares for sale to the public (the “Primary Offering”) and $95.0 million in common shares for sale pursuant to our distribution reinvestment plan (collectively, the “Offering”). On May 23, 2014, we satisfied the $1.5 million minimum offering requirements of our Offering and commenced formal operations. On September 28, 2015, we revised our Primary Offering and offered two classes of shares of common stock: Class A common stock, $0.001 par value per share (the “Class A Shares”); and Class T common stock, $0.001 par value per share (the “Class T Shares”). Our Primary Offering terminated on January 9, 2017. We sold approximately 48 million Class A Shares and approximately 7 million Class T Shares in our Offering for gross proceeds of approximately $493 million and approximately $73 million, respectively. On November 30, 2016, prior to the termination of our Offering, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $100.9 million in shares under our distribution reinvestment plan (our “DRP Offering”). The DRP Offering may be terminated at any time upon 10 days’ prior written notice to stockholders.  As of September 30, 2018, we had sold approximately 2.4 million Class A Shares and approximately 0.4 million Class T Shares for approximately $24.3 million and $3.7 million, respectively, in our DRP Offering.

As of September 30, 2018, our self storage portfolio was comprised as follows:

State	No. of Properties		Units(1)		Sq. Ft. (net)(2)		% of Total Rentable Sq. Ft.			Physical Occupancy %(3)			Rental Income %(4)
Alabama		1		1,080		159,000		2.7	%		91	%		1.4	%
California		19		11,470		1,233,400		20.5	%		89	%		24.8	%
Colorado		4		2,140		227,200		3.8	%		84	%		3.4	%
Florida		13		10,440		1,237,900		20.5	%		89	%		24.0	%
Illinois		2		1,030		107,500		1.8	%		84	%		1.3	%
Indiana		2		1,000		112,100		1.9	%		89	%		1.1	%
Maryland		2		1,610		172,900		2.9	%		83	%		3.1	%
Michigan		4		2,180		261,000		4.3	%		89	%		3.7	%
New Jersey		1		460		51,000		0.8	%		86	%		0.8	%
Nevada		3		2,220		290,400		4.8	%		91	%		4.3	%
North Carolina		14		5,720		822,100		13.6	%		89	%		10.5	%
Ohio		5		2,210		272,300		4.5	%		89	%		2.7	%
South Carolina		2		1,420		194,600		3.2	%		93	%		2.7	%
Washington		1		490		48,100		0.8	%		89	%		0.9	%
Greater Toronto Area		10		7,860		840,100		13.9	%		90	%		15.3	%
Total		83		51,330		6,029,600		100	%		89	%		100.0	%

⁽¹⁾ Includes all rentable units, consisting of storage units and parking (approximately 1,900 units).

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⁽²⁾ Includes all rentable square feet, consisting of storage units and parking (approximately 540,000 square feet).

⁽³⁾ Represents the occupied square feet of all facilities we owned in a state or province divided by total rentable square feet of all the facilities we owned in such state or area as of September 30, 2018.

⁽⁴⁾ Represents rental income (excludes administrative fees, late fees, and other ancillary income) for all facilities we owned in a state or province divided by our total rental income for the month ended September 30, 2018.

Merger Agreement with Strategic Storage Growth Trust, Inc.

On October 1, 2018, we, Strategic Storage Operating Partnership II, L.P. (our “Operating Partnership”), and SST II Growth Acquisition, LLC, our wholly-owned subsidiary (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Strategic Storage Growth Trust, Inc. (“SSGT”), a non-traded REIT sponsored by our Sponsor, and SS Growth Operating Partnership, L.P. (“SSGT OP”).  Pursuant to the terms of the Merger Agreement, SSGT will merge with and into Merger Sub, with Merger Sub being the surviving entity (the “REIT Merger”), and immediately after the REIT Merger, SSGT OP will merge with and into our Operating Partnership, with our Operating Partnership continuing as the surviving entity and our subsidiary (the “Partnership Merger” and, together with the REIT Merger, the “Mergers”).  

Subject to SSGT’s rights in connection with the go-shop provision described in further detail below, and pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the REIT Merger (the “REIT Merger Effective Time”), each share of SSGT common stock, outstanding immediately prior to the REIT Merger Effective Time (other than shares owned by SSGT and its subsidiaries or us and our subsidiaries) will be automatically converted into the right to receive an amount in cash equal to $12.00, without interest and less any applicable withholding taxes (the “Merger Consideration”), which represents a total purchase price of approximately $340 million (which includes outstanding debt to be assumed or repaid as of September 30, 2018 but excludes transaction costs). Immediately prior to the REIT Merger Effective Time, all shares of SSGT common stock that are subject to vesting and other restrictions will become fully vested and non-forfeitable and, at the REIT Merger Effective Time, will be converted into the right to receive the Merger Consideration. At the effective time of the Partnership Merger, each outstanding unit of partnership interest in SSGT OP will be converted automatically into 1.127 units of partnership interest in our Operating Partnership. We are in the process of negotiating new loans in order to finance the Mergers, which would include the financing of the SSGT properties, the refinancing of certain of our existing properties and the payoff of certain of our existing loans.

Assuming all of the conditions to the Mergers are satisfied and the Mergers are consummated in accordance with the terms in the Merger Agreement, we will acquire all of the real estate owned by SSGT, consisting of 28 self storage facilities located in 10 states and in the Greater Toronto, Canada area, and comprising approximately 19,300 self storage units and approximately 2.1 million net rentable square feet of storage space.  Additionally, we will obtain the rights to acquire two self storage facilities currently under contract with SSGT.

The Merger Agreement contains customary representations, warranties and covenants. The closing of the REIT Merger is subject to the approval of the REIT Merger by the affirmative vote of the holders of a majority of all outstanding shares of SSGT’s common stock as of the record date for the special meeting of SSGT’s stockholders. The closing of the Mergers is also subject to various customary conditions. The closing of the REIT Merger is neither subject to a financing condition nor to the approval of our stockholders.

The Merger Agreement prohibits SSGT and its subsidiaries and representatives from soliciting, providing information or entering into discussions concerning proposals relating to alternative business combination transactions, subject to certain limited exceptions. However, under the terms of the Merger Agreement, during the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. New York City time on November 15, 2018 (the “Go Shop Period End Time”), SSGT (through the special committee of SSGT’s board of directors and its representatives) may initiate, solicit, provide information and enter into discussions concerning proposals relating to alternative business combination transactions. For up to five business days after the Go Shop Period End Time, SSGT may continue to participate in such discussions with a Go Shop Bidder (as defined in the Merger Agreement) and may, subject to certain conditions set forth in the Merger Agreement regarding the proposal made by such Go Shop Bidder, terminate the Merger Agreement and enter into an agreement with a Go Shop Bidder with respect to the proposal made by such Go Shop Bidder. The Merger Agreement also provides that, at any time beginning on the sixth business day after the Go Shop Period End Time and prior to receipt of the approval of SSGT’s stockholders, SSGT’s board of directors may, in certain circumstances, make an Adverse Recommendation Change (as such term is defined in the Merger Agreement) and terminate the Merger Agreement, subject to complying with certain conditions set forth in the Merger Agreement.

In connection with the termination of the Merger Agreement and SSGT’s entry into an alternative transaction with respect to a superior proposal, as well as under other specified circumstances, SSGT will be required to pay us a termination

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fee of $2.9 million in the event of termination on or prior to the fifth business day following the Go Shop Period End Time, or $9.6 million in the event of termination thereafter. In addition, the Merger Agreement provides for customary expense reimbursement under specified circumstances set forth in the Merger Agreement. The Merger Agreement also provides that we will be required to pay SSGT a reverse termination fee of $9.6 million under specified circumstances set forth in the Merger Agreement related to our failure to consummate the Closing.

We expect the SSGT stockholders meeting to occur in the first quarter of 2019 and, if approved by the SSGT stockholders, we expect the Mergers to close shortly thereafter.  However, there is no guarantee that the Mergers will be consummated.

Critical Accounting Policies

We have established accounting policies which conform to generally accepted accounting principles (“GAAP”). Preparing financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. Following is a discussion of the estimates and assumptions used in setting accounting policies that we consider critical in the presentation of our financial statements. Many estimates and assumptions involved in the application of GAAP may have a material impact on our financial condition or operating performance, or on the comparability of such information to amounts reported for other periods, because of the subjectivity and judgment required to account for highly uncertain items or the susceptibility of such items to change. These estimates and assumptions affect our reported amounts of assets and liabilities, our disclosure of contingent assets and liabilities at the dates of the financial statements and our reported amounts of revenue and expenses during the period covered by this report. If management’s judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied or different amounts of assets, liabilities, revenues and expenses would have been recorded, thus resulting in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements. Additionally, other companies may use different estimates and assumptions that may impact the comparability of our financial condition and results of operations to
those companies.

We believe that our critical accounting policies include the following: real estate purchase price allocations; the evaluation of whether any of our long-lived assets have been impaired; the determination of the useful lives of our long-lived assets; and the evaluation of the consolidation of our interests in joint ventures. The following discussion of these policies supplements, but does not supplant the description of our significant accounting policies, as contained in Note 2 of the Notes to the Consolidated Financial Statements contained in this report, and is intended to present our analysis of the uncertainties involved in arriving upon and applying each policy.

Real Estate Purchase Price Allocation

We account for acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values. This guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs as of the acquisition date.

The value of the tangible assets, consisting of land and buildings is determined as if vacant. Because we believe that substantially all of the leases in place at properties we will acquire will be at market rates, as the majority of the leases are month-to-month contracts, we do not expect to allocate any portion of the purchase prices to above or below market leases. We also consider whether in-place, market leases represent an intangible asset. Acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available.

Our allocations of purchase prices are based on certain significant estimates and assumptions, variations in such estimates and assumptions could result in a materially different presentation of the consolidated financial statements or materially different amounts being reported in the consolidated financial statements.

Impairment of Long-Lived Assets

The majority of our assets consist of long-lived real estate assets as well as intangible assets related to our acquisitions. We evaluate such assets for impairment based on events and changes in circumstances that may arise in the future and that may impact the carrying amounts of our long-lived assets. When indicators of potential impairment are present, we assess the

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recoverability of the particular asset by determining whether the carrying value of the asset will be recovered, through an evaluation of the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. This evaluation is based on a number of estimates and assumptions. Based on this evaluation, if the expected undiscounted future cash flows do not exceed the carrying value, we adjust the value of the long-lived asset and recognize an impairment loss. Our evaluation of the impairment of long-lived assets could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as the amount of impairment loss recognized, if any, may vary based on the estimates and assumptions we use.

Estimated Useful Lives of Long-Lived Assets

We assess the useful lives of the assets underlying our properties based upon a subjective determination of the period of future benefit for each asset. We record depreciation expense with respect to these assets based upon the estimated useful lives we determine. Our determinations of the useful lives of the assets could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as such determinations, and the corresponding amount of depreciation expense, may vary dramatically based on the estimates and assumptions
we use.

Consolidation of Investments in Joint Ventures

We evaluate the consolidation of our investments in joint ventures in accordance with relevant accounting guidance. This evaluation requires us to determine whether we have a controlling interest in a joint venture through a means other than voting rights, and, if so, such joint venture may be required to be consolidated in our financial statements. Our evaluation of our joint ventures under such accounting guidance could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as the joint venture entities included in our financial statements may vary based on the estimates and assumptions we use.

REIT Qualification

We made an election under Section 856(c) of the Internal Revenue Code of 1986 (the Code) to be taxed as a REIT under the Code, commencing with the taxable year ended December 31, 2014. By qualifying as a REIT for federal income tax purposes, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which our qualification is denied. Such an event could materially and adversely affect our net income and could have a material adverse impact on our financial condition and results of operations. However, we believe that we are organized and operate in a manner that will enable us to continue to qualify for treatment as a REIT for federal income tax purposes, and we intend to continue to operate as to remain qualified as a REIT for federal income tax purposes.

Results of Operations

Overview

We derive revenues principally from: (i) rents received from tenants who rent storage units under month-to-month leases at each of our self storage facilities; (ii) sales of packing- and storage-related supplies at our storage facilities; and (iii) our tenant insurance program. Therefore, our operating results depend significantly on our ability to retain our existing tenants and lease our available self storage units to new tenants, while maintaining and, where possible, increasing rents for our self storage units. Additionally, our operating results depend on our tenants making their required rental payments to us and, to a lesser degree, the success of our tenant insurance program.

Competition in the market areas in which we operate is significant and affects the occupancy levels, rental rates, rental revenues and operating expenses of our facilities. Development of any new self storage facilities would intensify competition of self storage operators in markets in which we operate.

As of September 30, 2018 and 2017, we owned 83 self storage facilities. Our operating results for the three months ended September 30, 2018 and 2017 include full quarter results for all 83 self storage facilities.  Our operating results for the nine months ended September 30, 2017 include full period results for 77 self storage facilities and partial period results for 6 facilities acquired during the nine months ended September 30, 2017. Our operating results for the nine months ended September 30, 2018 include full period results for all 83 self storage facilities.

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Operating results in future periods will depend on the results of operations of our existing properties and of the real estate properties that we acquire in the future.

Comparison of Operating Results for the Three Months Ended September 30, 2018 and 2017

Total Revenues

Total revenues for the three months ended September 30, 2018 and 2017 were approximately $20.3 million and $19.9 million, respectively. The increase in total revenues of approximately $0.4 million or 1.9% is attributable to same-store revenue growth of approximately $0.2 million or 1.0%, and approximately $0.2 million increase related to three lease up facilities.

Property Operating Expenses

Property operating expenses for the three months ended September 30, 2018 and 2017 were approximately $6.4 million (approximately 32% of total revenues) and $6.5 million (approximately 32% of total revenues), respectively. Property operating expenses includes the cost to operate our facilities including payroll, utilities, insurance, real estate taxes, and marketing. The slight decrease in property operating expenses is primarily attributable to a decrease in payroll, partially offset by an increase in advertising expense.

Property Operating Expenses – Affiliates

Property operating expenses – affiliates for the three months ended September 30, 2018 and 2017 were approximately $2.6 million and $3.3 million, respectively. Property operating expenses – affiliates includes property management fees and asset management fees. The decrease in property operating expenses – affiliates of approximately $0.7 million is primarily attributable to the costs incurred in conjunction with the change in property management during the third quarter of 2017. See Note 7 – Related Party Transactions – Property Management Agreement.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2018 and 2017 were approximately $1.0 million and $0.8 million, respectively. General and administrative expenses consist primarily of legal expenses, transfer agent fees, directors’ and officers’ insurance expense, an allocation of a portion of our Advisor’s payroll related costs, accounting expenses and board of directors related costs. The increase in general and administrative expenses of approximately $0.2 million is primarily attributable to increases in legal fees, and an increase in our Advisor’s payroll related costs as a result of the change in property management.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for the three months ended September 30, 2018 and 2017 were approximately $5.3 million and $8.7 million, respectively. Depreciation expense consists primarily of depreciation on the buildings and site improvements at our properties. Amortization expense consists of the amortization of intangible assets resulting from our acquisitions. The decrease in depreciation and amortization expense is primarily attributable to certain of our intangible assets associated with in-place leases being fully amortized during 2017 and 2018.

Acquisition Expenses – Affiliates

Acquisition expenses – affiliates for the three months ended September 30, 2018 and 2017 were approximately $16,000 and $0, respectively. For the three months ended September 30, 2018, these costs primarily relate to costs for the potential SSGT merger prior to such merger becoming probable in accordance with our capitalization policy.

Other Property Acquisition Expenses

Other property acquisition expenses for the three months ended September 30, 2018 and 2017 were approximately $0.6 million and $0, respectively. For the three months ended September 30, 2018, these costs primarily relate to costs for the potential SSGT merger prior to such merger becoming probable in accordance with our capitalization policy.

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Interest Expense and Accretion of Fair Market Value of Secured Debt

Interest expense and the accretion of fair market value of secured debt for the three months ended September 30, 2018 and 2017 were approximately $4.5 million and $4.2 million, respectively. The increase of approximately $0.3 million is primarily attributable to an increase in our outstanding debt and an increase in interest rates as it relates to our variable rate debt. We expect interest expense to fluctuate in future periods commensurate with our future debt level and interest rates.

Interest Expense – Debt Issuance Costs

Interest expense – debt issuance costs for the three months ended September 30, 2018 and 2017 were approximately $0.3 million and $0.3 million, respectively. We expect debt issuance costs to fluctuate commensurate with our future financing activity.

Same-Store Facility Results – Three Months Ended September 30, 2018 and 2017

The following table sets forth operating data for our same-store facilities (those properties included in the consolidated results of operations since July 1, 2017 excluding Oakville I, Centennial, and Granite which were lease-up facilities for the three months ended September 30, 2017) for the three months ended September 30, 2018 and 2017. We consider the following data to be meaningful as this allows for the comparison of results without the effects of acquisition or development activity.

	Same-Store Facilities									Non Same-Store Facilities					Total
	2018			2017			% Change			2018		2017		% Change	2018			2017			% Change
Revenue (1)	$	19,632,702		$	19,432,118			1.0	%	$	680,367	$	507,394	N/M	$	20,313,069		$	19,939,512			1.9	%
Property operating expenses (2)		7,284,944			7,260,557			0.3	%		345,978		370,649	N/M		7,630,922			7,631,206			0	%
Property operating income	$	12,347,758		$	12,171,561			1.4	%	$	334,389	$	136,745	N/M	$	12,682,147		$	12,308,306			3.0	%
Number of facilities		80			80						3		3			83			83
Rentable square feet (3)		5,800,000			5,800,000						229,600		229,600			6,029,600			6,029,600
Average physical occupancy (4)		89.3	%		93.7	%				N/M		N/M				89.2	%		92.8	%
Annualized revenue per occupied square foot (5)	$	16.01		$	15.08					N/M		N/M			$	15.92		$	15.00

N/M Not meaningful

⁽¹⁾ Revenue includes rental revenue, ancillary revenue, and administrative and late fees.

⁽²⁾ Property operating expenses excludes corporate general and administrative expenses, asset management fees, interest expense, depreciation, amortization expense, acquisition expenses, and costs incurred in connection with the property management change during 2017, but includes property management fees.

⁽³⁾ Of the total rentable square feet, parking represented approximately 540,000 square feet as of September 30, 2018 and 2017. On a same-store basis, for the same periods, parking represented approximately 530,000 square feet.

⁽⁴⁾ Determined by dividing the sum of the month-end occupied square feet for the applicable group of facilities for each applicable period by the sum of their month-end rentable square feet for the period.

⁽⁵⁾ Determined by dividing the aggregate realized revenue for each applicable period by the aggregate of the month-end occupied square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate. We have excluded the realized revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot.

Our increase in same-store revenue of approximately $0.2 million was primarily the result of increased annualized revenue per occupied square foot of approximately 6.2%, net of decreased average physical occupancy of approximately 4.4% for the three months ended September 30, 2018 over the three months ended September 30, 2017. Contributing to the increase was approximately $0.4 million of tenant insurance related revenue.

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The following table presents a reconciliation of net loss, as presented on our consolidated statements of operations, to property operating income for the periods indicated:

	For the Three Months Ended September 30,
	2018			2017
Net loss	$	(457,278	)	$	(3,875,164	)
Adjusted to exclude:
Costs incurred in connection with the property management changes(1)		—			775,709
Asset management fees (2)		1,357,435			1,356,792
General and administrative		999,439			762,642
Depreciation		5,097,944			5,145,952
Intangible amortization expense		179,613			3,525,476
Acquisition expenses—affiliates		16,422			—
Other property acquisition expenses		554,661			—
Interest expense		4,587,573			4,310,132
Interest expense—accretion of fair market value of secured debt		(111,383	)		(113,718	)
Interest expense—debt issuance costs		330,639			329,877
Other		127,082			90,608
Property operating income	$	12,682,147		$	12,308,306

⁽¹⁾ Costs incurred in connection with the property management change are included in property operating expenses-affiliates in the consolidated statements of operations for the three months ended September 30, 2017.

⁽²⁾ Asset management fees are included in Property operating expenses – affiliates in the consolidated statements of operations.

Comparison of Operating Results for the Nine Months Ended September 30, 2018 and 2017

Total Revenues

Total revenues for the nine months ended September 30, 2018 and 2017 were approximately $60.2 million and $56.7 million, respectively. The increase in total revenues of approximately $3.5 million or 6.2%, is primarily attributable to same-store revenue growth of approximately $2.1 million or 4.1% (approximately $1.0 million of which relates to tenant insurance) and the six properties acquired in the first quarter of 2017 which provided an additional approximately $1.4 million of revenue during the nine months ended September 30, 2018 when compared to the same period in 2017.

Property Operating Expenses

Property operating expenses for the nine months ended September 30, 2018 and 2017 were approximately $18.6 million (approximately 31% of total revenues) and $18.4 million (approximately 32% of total revenues), respectively. Property operating expenses includes the cost to operate our facilities including payroll, utilities, insurance, real estate taxes, and marketing. The increase in property operating expenses of approximately $0.2 million is primarily attributable to advertising, partially offset by a decrease in payroll.

Property Operating Expenses – Affiliates

Property operating expenses – affiliates for the nine months ended September 30, 2018 and 2017 were approximately $7.7 million and $8.1 million, respectively. Property operating expenses – affiliates includes property management fees and asset management fees. The decrease in property operating expenses – affiliates of approximately $0.4 million is primarily attributable to costs incurred in conjunction with the change in property management during the third quarter of 2017 of $0.8 million (See Note 7 - Related Party Transactions - Property Management Agreement), partially offset by an increase in property management fees resulting primarily from an increase in total revenues.

General and Administrative Expenses

General and administrative expenses for the nine months ended September 30, 2018 and 2017 were approximately $3.6 million and $2.6 million, respectively. General and administrative expenses consist primarily of legal expenses, transfer agent fees, directors’ and officers’ insurance expense, an allocation of a portion of our Advisor’s payroll related costs, accounting expenses and board of directors related costs. The increase in general and administrative expenses of

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approximately $1.0 million is primarily attributable to increases in our Advisor’s payroll related costs, board of director related costs, marketing, and legal expenses.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for the nine months ended September 30, 2018 and 2017 were approximately $17.6 million and $25.9 million, respectively. Depreciation expense consists primarily of depreciation on the buildings and site improvements at our properties. Amortization expense consists of the amortization of intangible assets resulting from our acquisitions. The decrease in depreciation and amortization expense is primarily attributable to certain of our intangible assets associated with in-place leases being fully amortized during 2017 and 2018.

Acquisition Expenses – Affiliates

Acquisition expenses – affiliates for the nine months ended September 30, 2018 and 2017 were approximately $43,000 and $0.2 million, respectively. For the nine months ended September 30, 2018, these costs primarily relate to costs for the potential SSGT merger prior to such merger becoming probable in accordance with our capitalization policy. For the nine months ended September 30, 2017, these costs primarily relate to the costs associated with the self storage properties acquired during the period.

Other Property Acquisition Expenses

Other property acquisition expenses for the nine months ended September 30, 2018 and 2017 were approximately $0.8 million and $0.3 million, respectively. For the nine months ended September 30, 2018, these costs primarily relate to costs for the potential SSGT merger prior to such merger becoming probable in accordance with our capitalization policy. For the nine months ended September 30, 2017, these costs primarily relate to the costs associated with the self storage properties acquired during the period.

Interest Expense and Accretion of Fair Market Value of Secured Debt

Interest expense and the accretion of fair market value of secured debt for the nine months ended September 30, 2018 and 2017 were approximately $13.1 million and $11.7 million, respectively. The increase of approximately $1.3 million is primarily attributable to the additional debt obtained in conjunction with the six self storage properties acquired during the first quarter of 2017, as well as an increase in interest rates as it relates to our variable rate debt. We expect interest expense to fluctuate in future periods commensurate with our future debt level and interest rates.

Interest Expense – Debt Issuance Costs

Interest expense – debt issuance costs for the nine months ended September 30, 2018 and 2017 were approximately $1.0 million and $1.8 million, respectively. The decrease in interest expense – debt issuance costs is primarily attributable to approximately $0.8 million of costs incurred related to debt issuance costs that were expensed in accordance with GAAP during 2017.  We expect debt issuance costs to fluctuate commensurate with our future financing activity.

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Same-Store Facility Results – Nine Months Ended September 30, 2018 and 2017

The following table sets forth operating data for our same-store facilities (those properties included in the consolidated results of operations since January 1, 2017, excluding Oakville I, which was a lease-up facility during 2017) for the nine months ended September 30, 2018 and 2017. We consider the following data to be meaningful as this allows for the comparison of results without the effects of acquisition or development activity.

	Same-Store Facilities									Non Same-Store Facilities					Total
	2018			2017			% Change			2018		2017		% Change	2018			2017			% Change
Revenue (1)	$	53,746,000		$	51,613,157			4.1	%	$	6,479,042	$	5,110,677	N/M	$	60,225,042		$	56,723,834			6.2	%
Property operating expenses (2)		19,452,283			19,182,384			1.4	%		2,786,835		2,566,970	N/M		22,239,118			21,749,354			2.3	%
Property operating income	$	34,293,717		$	32,430,773			5.7	%	$	3,692,207	$	2,543,707	N/M	$	37,985,924		$	34,974,480			8.6	%
Number of facilities		76			76						7		7			83			83
Rentable square feet(3)		5,433,400			5,433,400						596,200		596,200			6,029,600			6,029,600
Average physical occupancy (4)		88.8	%		93.3	%				N/M		N/M				88.7	%		91.9	%
Annualized revenue per occupied square foot(5)	$	15.72		$	14.31					N/M		N/M			$	15.81		$	14.48

N/M Not meaningful

⁽¹⁾ Revenue includes rental revenue, ancillary revenue, and administrative and late fees.

⁽²⁾ Property operating expenses excludes corporate general and administrative expenses, asset management fees, interest expense, depreciation, amortization expense, acquisition expenses, and costs incurred in connection with the property management changes during 2017, but includes property management fees.

⁽³⁾ Of the total rentable square feet, parking represented approximately 540,000 as of September 30, 2018 and 2017. On a same-store basis, for the same periods, parking represented approximately 530,000 square feet.

⁽⁴⁾ Determined by dividing the sum of the month-end occupied square feet for the applicable group of facilities for each applicable period by the sum of their month-end rentable square feet for the period.

⁽⁵⁾ Determined by dividing the aggregate realized revenue for each applicable period by the aggregate of the month-end occupied square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate. We have excluded the realized revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot.

Our increase in same-store revenue of approximately $2.1 million was primarily the result of increased revenue per occupied square foot of approximately 9.9% net of decreased average physical occupancy of approximately 4.5% for the nine months ended September 30, 2018 over the nine months ended September 30, 2017. Contributing to the increase was approximately $1.0 million of tenant insurance related revenue.

Our same-store property operating expenses increased by approximately $0.3 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 primarily due to an increase in advertising expenses and property management fees resulting from an increase in total revenue partially offset by a decrease in payroll.

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The following table presents a reconciliation of net loss, as presented on our consolidated statements of operations, to property operating income for the periods indicated:

	For the Nine Months Ended September 30,
	2018			2017
Net loss	$	(2,561,655	)	$	(12,635,135	)
Adjusted to exclude:
Costs incurred in connection with the property management changes (1)		—			775,709
Asset management fees (2)		4,085,857			3,978,872
General and administrative		3,632,649			2,642,433
Depreciation		15,245,530			14,865,271
Intangible amortization expense		2,398,378			11,026,239
Acquisition expenses—affiliates		42,642			212,577
Other property acquisition expenses		808,091			292,022
Interest expense		13,417,041			11,979,432
Interest expense—accretion of fair market value of    secured debt		(336,894	)		(231,388	)
Interest expense—debt issuance costs		975,591			1,849,114
Other		278,694			219,334
Property operating income	$	37,985,924		$	34,974,480

⁽¹⁾ Costs incurred in connection with the property management change are included in property operating expenses-affiliates in the consolidated statements of operations for the nine months ended September 30, 2017.

⁽²⁾ Asset management fees are included in Property operating expenses – affiliates in the consolidated statements of operations.

Non-GAAP Financial Measures

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a measure known as funds from operations, or FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to our net income (loss) as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004, or the White Paper. The White Paper defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and asset impairment write downs, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Our FFO calculation complies with NAREIT’s policy described above.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Diminution in value may occur if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances or other measures necessary to maintain the assets are not undertaken. However, we believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. In addition, in the determination of FFO, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions which can change over time. An asset will only be evaluated for impairment if certain impairment indications exist and if the carrying value, or book value, exceeds the total estimated undiscounted future cash flows (including net rental revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset. Testing for impairment is a continuous process and is analyzed on a quarterly basis. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an

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impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, investors are cautioned that due to the fact that impairments are based on estimated future undiscounted cash flows and that we intend to have a relatively limited term of our operations; it could be difficult to recover any impairment charges through the eventual sale of the property. To date, we have not recognized any impairments.

Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization and impairments, assists in providing a more complete understanding of our performance to investors and to our management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income (loss).

However, FFO or modified funds from operations (“MFFO”), discussed below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be considered a more relevant measure of operational performance and is, therefore, given more prominence than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

Changes in the accounting and reporting rules under GAAP that were put into effect and other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses. Prior to January 1, 2018, when we adopted new accounting guidance, such costs were entirely expensed as operating expenses under GAAP. Subsequent to January 1, 2018, certain of such costs continue to be expensed. We believe these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-traded REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. The purchase of properties, and the corresponding expenditures associated with that process, is a key feature of our business plan in order to generate operational income and cash flow in order to make distributions to investors. While other start-up entities may also experience significant acquisition activity during their initial years, we believe that publicly registered, non-traded REITs are unique in that they typically have a limited life with targeted exit strategies within a relatively limited time frame after the acquisition activity ceases. We have used the proceeds raised in our Offering, including our DRP Offering, to acquire properties, and we expect to begin the process of achieving a liquidity event (i.e., listing of our shares of common stock on a national securities exchange, a merger or sale, the sale of all or substantially all of our assets, or another similar transaction) within three to five years after the completion of our Primary Offering, which is generally comparable to other publicly registered, non-traded REITs. Thus, we do not intend to continuously purchase assets and intend to have a limited life. The decision whether to engage in any liquidity event is in the sole discretion of our board of directors. Due to the above factors and other unique features of publicly registered, non-traded REITs, the Investment Program Association, or the IPA, an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered, non-traded REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a publicly registered, non-traded REIT having the characteristics described above. MFFO is not equivalent to our net income (loss) as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not ultimately engage in a liquidity event. We believe that, because MFFO excludes any acquisition fees and expenses that affect our operations only in periods in which properties are acquired and that we consider more reflective of investing activities, as well as other non-operating items included in FFO, MFFO can provide, on a going-forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring our properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance after our Primary Offering has been completed and our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the publicly registered, non-traded REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance after our Primary Offering and acquisitions are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. Investors are cautioned that MFFO should only be used to assess the sustainability of our operating performance after our Primary Offering has been completed and properties have been acquired, as it excludes any acquisition fees and expenses that have a negative effect on our operating performance during the periods in which properties are acquired.

We define MFFO, a non-GAAP measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds From Operations (the “Practice Guideline”) issued by

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the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items included in the determination of GAAP net income (loss): acquisition fees and expenses; amounts relating to straight line rents and amortization of above or below intangible lease assets and liabilities; accretion of discounts and amortization of premiums on debt investments; non-recurring impairments of real estate related investments; mark-to-market adjustments included in net income; non-recurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, adjustments relating to contingent purchase price obligations included in net income, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income (loss) in calculating cash flows from operations and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized.

Our MFFO calculation complies with the IPA’s Practice Guideline described above. In calculating MFFO, we exclude acquisition related expenses, the amortization of fair value adjustments related to debt, mark to market adjustments recorded in net income related to our derivatives, and the adjustments of such items related to noncontrolling interests. The other adjustments included in the IPA’s Practice Guideline are not applicable to us for the periods presented. Acquisition fees and expenses are paid in cash by us, and we have not set aside or put into escrow any specific amount of proceeds from our Offering to be used to fund acquisition fees and expenses. We do not intend to fund acquisition fees and expenses in the future from operating revenues and cash flows, nor from the sale of properties and subsequent re-deployment of capital and concurrent incurrence of acquisition fees and expenses. Acquisition fees and expenses include payments to our Advisor and third parties. Certain acquisition related expenses under GAAP are considered operating expenses and as expenses included in the determination of net income (loss) and income (loss) from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property. In the future, if we are not able to raise additional proceeds from our DRP Offering or other offerings, this could result in us paying acquisition fees or reimbursing acquisition expenses due to our Advisor, or a portion thereof, with net proceeds from borrowed funds, operational earnings or cash flows, net proceeds from the sale of properties, or ancillary cash flows. As a result, the amount of proceeds available for investment and operations would be reduced, or we may incur additional interest expense as a result of borrowed funds.

Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss) in determining cash flows from operations. In addition, we view fair value adjustments of derivatives and the amortization of fair value adjustments related to debt as items which are unrealized and may not ultimately be realized or as items which are not reflective of on-going operations and are therefore typically adjusted for when assessing operating performance.

We use MFFO and the adjustments used to calculate it in order to evaluate our performance against other publicly registered, non-traded REITs which intend to have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to publicly registered, non-traded REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures may be useful to investors. For example, acquisition fees and expenses are intended to be funded from the proceeds of our Offering and other financing sources and not from operations. By excluding any expensed acquisition fees and expenses, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such charges that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from

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continuing operations as an indication of our performance, as an alternative to cash flows from operations, which is an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other measurements as an indication of our performance. MFFO may be useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete.

Neither the SEC, NAREIT, nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the publicly registered, non-traded REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO. The following is a reconciliation of net income (loss), which is the most directly comparable GAAP financial measure, to FFO and MFFO for each of the periods presented below:

	Three Months Ended September 30, 2018			Three Months Ended September 30, 2017			Nine Months Ended September 30, 2018			Nine Months Ended September 30, 2017
Net loss (attributable to common stockholders)	$	(451,424	)	$	(3,840,775	)	$	(2,539,683	)	$	(12,534,550	)
Add:
Depreciation		5,037,930			5,107,435			15,060,835			14,756,893
Amortization of intangible assets		179,613			3,525,476			2,398,378			11,026,239
Deduct:
Adjustment for noncontrolling interests		(45,335	)		(76,667	)		(152,447	)		(207,947	)
FFO (attributable to common stockholders)		4,720,784			4,715,469			14,767,083			13,040,635
Other Adjustments:
Acquisition expenses(1)		571,083			—			850,733			504,599
Accretion of fair market value of secured debt(2)		(111,383	)		(113,718	)		(336,894	)		(231,388	)
Foreign currency and interest rate derivative gains, net(3)		—			—			(91,055	)		—
Adjustment for noncontrolling interests		(3,988	)		1,010			(3,658	)		(2,811	)
MFFO (attributable to common stockholders)	$	5,176,496		$	4,602,761		$	15,186,209		$	13,311,035

As discussed above, our results of operations for the three and nine months ended September 30, 2018 and 2017 have been impacted by an increase in same-store net operating income and our acquisitions, offset by increased interest and general and administrative expenses. The information below should be read in conjunction with the discussion regarding the acquisitions above.

⁽¹⁾ In evaluating investments in real estate, we differentiate the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for publicly registered, non-traded REITs that have generally completed their acquisition activity and have other similar operating characteristics. By excluding any expensed acquisition related expenses, we believe MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our Advisor and third parties. Acquisition related expenses that do not meet our capitalization policy under GAAP are considered operating expenses and as expenses included in the determination of net income (loss) and income (loss) from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property.

⁽²⁾ This represents the difference between the stated interest rate and the estimated market interest rate on assumed notes as of the date of acquisition. Such amounts have been excluded from MFFO because we believe MFFO provides useful supplementary information by focusing on operating fundamentals, rather than events not related to our normal operations. We are responsible for managing interest rate risk and do not rely on another party to manage such risk.

⁽³⁾ This represents the mark-to-market adjustment for our derivative instruments not designated for hedge accounting and the ineffective portion of the change in fair value of derivatives recognized in earnings. These derivative contracts are intended to manage the Company’s exposure to interest rate and foreign currency risk.

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Non-cash Items Included in Net Loss:

Provided below is additional information related to selected non-cash items included in net loss above, which may be helpful in assessing our operating results:

• Debt issuance costs of approximately $0.3 million and $0.3 million, respectively, were recognized for the three months ended September 30, 2018 and 2017. Debt issuance costs of approximately $1.0 million and $1.8 million, respectively, were recognized for the nine months ended September 30, 2018 and 2017.

Cash Flows

A comparison of cash flows for operating, investing and financing activities for the nine months ended September 30, 2018 and 2017 is as follows:

	Nine Months Ended
	September 30, 2018			September 30, 2017			Change
Net cash flow provided by (used in):
Operating activities	$	16,374,297		$	15,681,415		$	692,882
Investing activities		(2,153,915	)		(56,303,322	)		54,149,407
Financing activities		(16,975,884	)		39,915,580			(56,891,464	)

Cash flows provided by operating activities for the nine months ended September 30, 2018 and 2017 were approximately $16.4 million and $15.7 million, respectively, an increase of approximately $0.7 million. The increase in cash provided by our operating activities is primarily the result of an increase in net income from $13.3 million to $15.1 million, when excluding depreciation and amortization, offset by a decrease in working capital of approximately $1.1 million.

Cash flows used in investing activities for the nine months ended September 30, 2018 and 2017 were approximately $2.2 million and $56.3 million, respectively, a decrease of approximately $54.1 million. The decrease in cash used in investing activities primarily relates to a decrease in acquisitions of real estate of approximately $49.4 million during the nine months ended September 30, 2018, compared to the same period in 2017.

Cash flows provided by (used in) financing activities for the nine months ended September 30, 2018 and 2017 were approximately ($17.0 million) and $39.9 million, respectively, a change of approximately $56.9 million. The change in cash provided by (used in) financing activities is primarily attributable to approximately $18.9 million in proceeds from the issuance of common stock during the nine months ended September 30, 2017, compared to none for the same period in 2018, and approximately $36.2 million less in net proceeds from debt during the nine months ended September 30, 2018 compared to the same period in 2017.

Liquidity and Capital Resources

Short-Term Liquidity and Capital Resources

Our Primary Offering terminated on January 9, 2017. We generally expect that we will meet our short-term liquidity requirements from the combination of the proceeds from secured or unsecured financing from banks or other lenders, net cash provided by property operations and advances from our Advisor which will be repaid, without interest, as funds are available after meeting our current liquidity requirements, subject to the limitations on reimbursement set forth in our Advisory Agreement with our Advisor. Per the Advisory Agreement, all advances from our Advisor shall be reimbursed no less frequently than monthly, although our Advisor has indicated that it may waive such a requirement on a month-by-month basis.

Subsequent to September 30, 2018, we repaid $70.7 million of debt ($33.5 million of which was due during 2018), with the proceeds of a new two year term loan with Citibank, which may, in certain circumstances, be extended at our option for three consecutive terms of one year each. We also amended our Amended KeyBank Credit Facility (which represents approximately $89.2 million of debt), to extend the maturity date until February 20, 2019 and reduce the maximum borrowing capacity from $145 million to $110 million. See Notes 5 and 12 of the Notes to the Consolidated Financial Statements for more information. We are also in the process of negotiating new loans in order to finance the Mergers, which would include the financing of the SSGT properties, the refinancing of certain of our existing properties and the payoff of certain of our existing loans including the Amended KeyBank Credit Facility.

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Distribution Policy and Distributions

On September 20, 2018, our board of directors declared a distribution rate for the fourth quarter of 2018 of approximately $0.001644 per day per share on the outstanding shares of common stock payable to both Class A and Class T stockholders of record of such shares as shown on our books at the close of business on each day during the period, commencing on October 1, 2018 and continuing on each day thereafter through and including December 31, 2018. In connection with this distribution, after the stockholder servicing fee is paid, approximately $0.0014 per day will be paid per Class T share.  Such distributions payable to each stockholder of record during a month will be paid the following month.

Historically, we have primarily made distributions to our stockholders using proceeds of the Offering in anticipation of future cash flow. As such, this reduced the amount of capital we ultimately had available to invest in properties. Because substantially all of our operations will be performed indirectly through our Operating Partnership, our ability to pay distributions depends in large part on our Operating Partnership’s ability to pay distributions to its partners, including to us. In the event we do not have enough cash from operations to fund cash distributions, we may borrow, issue additional securities or sell assets in order to fund the distributions. Though we presently intend to pay only cash distributions, and potentially stock distributions, we are authorized by our charter to pay in-kind distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for our dissolution and the liquidation of our assets in accordance with the terms of the charter or distributions that meet all of the following conditions: (a) our board of directors advises each stockholder of the risks associated with direct ownership of the property; (b) our board of directors offers each stockholder the election of receiving such in-kind distributions; and (c) in-kind distributions are only made to those stockholders who accept such offer.

For some period after our Offering, we may not be able to pay distributions from our cash flows from operations, in which case distributions may be paid in part from debt financing.

Distributions are paid to our stockholders based on the record date selected by our board of directors. We currently pay distributions monthly based on daily declaration and record dates so that investors may be entitled to distributions immediately upon purchasing our shares. We expect to continue to regularly pay distributions unless our results of operations, our general financial condition, general economic conditions, or other factors inhibit us from doing so. Distributions are authorized at the discretion of our board of directors, which are directed, in substantial part, by its obligation to cause us to comply with the REIT requirements of the Code. Our board of directors may increase, decrease or eliminate the distribution rate that is being paid at any time. Distributions are made on all classes of our common stock at the same time. The per share amount of distributions on Class A Shares and Class T Shares differ because of different allocations of class-specific expenses. Specifically, distributions on Class T Shares are lower than distributions on Class A Shares because Class T Shares are subject to ongoing stockholder servicing fees. The funds we receive from operations that are available for distribution may be affected by a number of factors, including the following:

• our operating and interest expenses;

• the amount of distributions or dividends received by us from our indirect real estate investments;

• our ability to keep our properties occupied;

• our ability to maintain or increase rental rates;

• construction defects or capital improvements;

• capital expenditures and reserves for such expenditures;

• the issuance of additional shares; and

• financings and refinancings.

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The following shows our distributions paid and the sources of such distributions for the respective periods presented:

	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
Distributions paid in cash — common stockholders	$	13,115,607			$	12,425,167
Distributions paid in cash — Operating Partnership    unitholders		226,646				177,398
Distributions reinvested		12,042,676				11,988,010
Total distributions	$	25,384,929			$	24,590,575
Source of distributions
Cash flows provided by operations	$	16,374,297	65	%	$	15,681,415	64	%
Offering proceeds from Primary Offering		—	—			—	—
Offering proceeds from distribution reinvestment    plan		9,010,632	35	%		8,909,160	36	%
Total sources	$	25,384,929	100	%	$	24,590,575	100	%

From our inception through September 30, 2018, we paid cumulative distributions of approximately $88.3 million, as compared to cumulative FFO of approximately $20.4 million. For the nine months ended September 30, 2018, we paid distributions of approximately $25.4 million, as compared to an FFO of approximately $14.8 million which reflects acquisition related expenses of approximately $0.9 million. For the nine months ended September 30, 2017, we paid distributions of approximately $24.6 million, as compared to FFO of approximately $13.0 million which reflects acquisition related expenses of approximately $0.5 million. The payment of distributions from sources other than FFO may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds.

We must distribute to our stockholders at least 90% of our taxable income each year in order to meet the requirements for being treated as a REIT under the Code. Our directors may authorize distributions in excess of this percentage as they deem appropriate. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period, but may be made in anticipation of cash flow that we expect to receive during a later period and may be made in advance of actual receipt of funds in an attempt to make distributions relatively uniform. To allow for such differences in timing between the receipt of income and the payment of expenses, and the effect of required debt payments, among other things, we could be required to borrow funds from third parties on a short-term basis, issue new securities, or sell assets to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT. We are not prohibited from undertaking such activities by our charter, bylaws or investment policies, and we may use an unlimited amount from any source to pay our distributions. These methods of obtaining funding could affect future distributions by increasing operating costs and decreasing available cash, which could reduce the value of our stockholders’ investment in our shares. In addition, such distributions may constitute a return of investors’ capital.

We may not be able to pay distributions from our cash flows from operations, in which case distributions may be paid in part from debt financing and pursuant to our distribution reinvestment plan. The payment of distributions from sources other than cash flows from operations may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds.

Over the long-term, we expect that a greater percentage of our distributions will be paid from cash flows from operations. However, our operating performance cannot be accurately predicted and may deteriorate in the future due to numerous factors, including our ability to raise and invest capital at favorable yields, the financial performance of our investments in the current real estate and financial environment and the types and mix of investments in our portfolio. As a result, future distributions declared and paid may exceed cash flow from operations.

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Indebtedness

As of September 30, 2018, our total indebtedness was approximately $395.9 million, which included approximately $261.0 million in fixed rate debt, $135.7 million in variable rate debt and approximately $1.3 million in debt premium less approximately $2.1 million in debt issuance costs. Some of our loans have maturity dates within the next year. Subsequent to September 30, 2018, we (i) refinanced approximately $70.7 million in debt encumbering our Canadian properties, and (ii) extended the maturity date for approximately $89.2 million in other debt from December 22, 2018 to February 20, 2019. See Notes 5 and 12 of the Notes to the Consolidated Financial Statements for more information about our indebtedness.

Long-Term Liquidity and Capital Resources

On a long-term basis, our principal demands for funds will be for property acquisitions, either directly or through entity interests, for the payment of operating expenses and distributions, and for the payment of interest on our outstanding indebtedness, if any.

Long-term potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders, issuance of equity instruments, undistributed funds from operations, and additional public or private offerings. To the extent we are not able to secure requisite financing in the form of a credit facility or other debt, we will be dependent upon proceeds from the issuance of equity securities and cash flows from operating activities in order to meet our long-term liquidity requirements and to fund our distributions.

Contractual Obligations

The following table summarizes our contractual obligations as of September 30, 2018:

	Payments due during the years ending December 31:
	Total		2018		2019-2020		2021-2022		Thereafter
Debt interest(1)	$	75,832,918	$	4,861,459	$	22,823,268	$	20,133,890	$	28,014,301
Debt principal(2)(3)		396,676,953		122,872,859		38,762,167		17,319,513		217,722,414
Total contractual obligations	$	472,509,871	$	127,734,318	$	61,585,435	$	37,453,403	$	245,736,715

⁽¹⁾ Interest expense for fixed rate debt was calculated based upon the contractual rate and the interest expense on variable rate debt was calculated based on the rate in effect on September 30, 2018. Interest expense on the Amended KeyBank Credit Facility is calculated presuming the amount outstanding as of September 30, 2018 would remain outstanding through the maturity date of December 22, 2018. Debt denominated in foreign currency has been converted based on the rate in effect as of September 30, 2018.

⁽²⁾ Amount represents principal payments only, excluding debt premium and debt issuance costs.

⁽³⁾ On October 11, 2018, we repaid approximately $70.7 million of Canadian debt with the proceeds from a new loan with Citibank. On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. Subsequent to these debt transactions, future principal payment requirements for the years ending December 31, 2018, 2019-2020, 2021-2022, and thereafter are approximately $0.2 million, $173.2 million, $5.6 million, and $217.7 million, respectively.

Off-Balance Sheet Arrangements

Other than our joint venture with SmartCentres and our tenant insurance joint venture, both of which are accounted for using the equity method of accounting, we do not currently have any other relationships with unconsolidated entities or financial partnerships. Such entities are often referred to as structured finance or special purpose entities, which typically are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Subsequent Events

Please see Note 12 of the Notes to the Consolidated Financial Statements contained in this report.

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Seasonality

We believe that we will experience minor seasonal fluctuations in the occupancy levels of our facilities, which we believe will be slightly higher over the summer months due to increased moving activity.

ITEM  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk and to a lesser extent, foreign currency risk. We may be exposed to the effects of interest rate changes primarily as a result of borrowings used to maintain liquidity and fund acquisition, expansion, and financing of our real estate investment portfolio and operations. Our interest rate risk management objectives will be to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we may borrow at fixed rates or variable rates. We may also enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument. We will not enter into derivative or interest rate transactions for speculative purposes.

As of September 30, 2018, our total indebtedness was approximately $395.9 million, which included approximately $261.0 million in fixed rate debt, $135.7 million in variable rate debt and approximately $1.3 million in debt premium less approximately $2.1 million in debt issuance costs. As of December 31, 2017, our total indebtedness was approximately $396.8 million, which included approximately $263.4 million in fixed rate debt, $134.1 million in variable rate debt and approximately $1.6 million in debt premium less approximately $2.4 million in debt issuance costs. Our debt instruments were entered into for other than trading purposes. Changes in interest rates have different impacts on the fixed and variable rate debt. A change in interest rates on fixed rate debt impacts its fair value but has no impact on interest incurred or cash flows. A change in interest rates on variable debt could impact the interest incurred and cash flows and its fair value. If the underlying rate of the related index on our variable rate debt were to increase by 100 basis points, the increase in interest if that debt were to be outstanding a full year would decrease future earnings and cash flows by approximately $0.5 million annually. (Our variable rate LIBOR based debt has an interest rate cap with a notional amount of $90 million that caps LIBOR at 1.25% through December 22, 2018.)

Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.

The following table summarizes future debt maturities and average interest rates on our outstanding debt as of September 30, 2018:

	Year Ending December 31,
	2018			2019			2020			2021			2022			Thereafter			Total
Fixed rate debt(2)	$	10,381,074		$	25,879,034		$	1,362,535		$	1,983,016		$	3,635,428		$	217,722,414		$	260,963,501
Average interest rate(1)		4.35	%		4.41	%		4.46	%		4.46	%		4.46	%		4.46	%
Variable rate debt(2)	$	112,491,785		$	260,299		$	11,260,299		$	11,701,069		$	—		$	—		$	135,713,452
Average interest rate(1)		5.01	%		5.14	%		4.81	%		4.34	%	N/A				—

⁽¹⁾ Interest expense for fixed rate debt was calculated based upon the contractual rate and the interest expense on variable rate debt was calculated based on the rate in effect on September 30, 2018. Interest expense on the Amended KeyBank Credit Facility is calculated presuming the amount outstanding as of September 30, 2018 would remain outstanding through the maturity date of December 22, 2018. Debt denominated in foreign currency has been converted based on the rate in effect as of September 30, 2018.

⁽²⁾ On October 11, 2018, we repaid approximately $70.7 million of Canadian debt with the proceeds from a new loan with Citibank. On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. Subsequent to these debt transactions, future principal payment requirements for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter are approximately $0.2 million, $90.1 million, $83.1 million, $2.0 million, $3.6 million, and $217.7 million, respectively.

Currently, our only foreign exchange rate risk comes from our Canadian properties and the Canadian Dollar (“CAD”). Our existing foreign currency hedge mitigates most of our foreign currency exposure of our net CAD denominated

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investments; however, we generate all of our revenues and expend essentially all of our operating expenses and third party debt service costs related to our Canadian properties in CAD. As a result of fluctuations in currency exchange, our cash flows and results of operations could be affected.

ITEM  4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM  1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A, “Risk Factors” of our 2017 Form 10-K, as well as in Part II, Item 1A, “Risk Factors" of our subsequent Quarterly Reports on Form 10-Q, which could materially affect our business, financial condition, and/or future results. The risks described in our reports filed with the SEC are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

With the exception of the risk factor set forth below, which updates the risk factors disclosed in our 2017 Form 10-K and our subsequent Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018, there have been no material changes to such risk factors.

Completion of the Mergers is subject to many conditions and if these conditions are not satisfied or waived, the Mergers will not be completed, which could result in the requirement, in certain circumstances, that we pay expenses to SSGT.

The Merger Agreement is subject to many conditions which must be satisfied or waived in order to complete the Mergers. The mutual conditions of the parties include, among others: (i) the approval of the REIT Merger by the holders of a majority of the outstanding shares of SSGT common stock; (ii) the absence of any law or order that would prohibit, restrain, enjoin, or make illegal the Mergers or any of the transactions contemplated by the Merger Agreement; and (iii) the receipt of all consents, authorizations, orders or approvals of each governmental authority necessary for the consummation of the Mergers and the other transactions contemplated by the Merger Agreement. In addition, each party’s obligation to consummate the Mergers is subject to certain other conditions, including, among others: (y) the accuracy of the other party’s representations and warranties (subject to customary materiality qualifiers and other customary exceptions); and (z) the other party’s compliance with its covenants and agreements contained in the Merger Agreement.

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There can be no assurance that the conditions to closing of the Mergers will be satisfied or waived or that the Mergers will be completed. Failure to consummate the Mergers may adversely affect our results of operations and business prospects for the following reasons, among others: (i) we will incur certain transaction costs, regardless of whether the proposed Mergers close, which could adversely affect our financial condition, results of operations and ability to make distributions to our stockholders; and (ii) the proposed Mergers, whether or not they close, will divert the attention of certain management and other key employees of our affiliates from ongoing business activities, including the pursuit of other opportunities that could be beneficial to us. In addition, we may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the REIT Merger is not completed by April 1, 2019, and if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, we may be required to pay SSGT a termination fee of $9.6 million. The Merger Agreement also provides that we may be required to reimburse SSGT’s transaction expenses, not to exceed $2.0 million, if the Merger Agreement is terminated under certain circumstances.

The borrowings we incur in connection with the Mergers may limit our financial and operating flexibility and we may incur additional borrowings, which could increase the risks associated with our borrowings.

In connection with the Mergers, we expect to refinance certain of our existing debt and incur new significant borrowings to, among other things, close on the Mergers.  Our borrowings could have material adverse consequences for our business and may:

• require us to dedicate a large portion of our cash flow to pay principal and interest on our borrowings, which will reduce the availability of cash flow to fund working capital, capital expenditures, and other business activities;

• increase our vulnerability to general adverse economic and industry conditions;

• subject us to maintaining various debt, operating income, net worth, cash flow, and other financial covenant ratios;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• restrict our operating policies and ability to make strategic acquisitions, dispositions, or exploiting business opportunities;

• place us at a competitive disadvantage compared to our competitors that have less borrowings;

• limit our ability to borrow more funds (even when necessary to maintain adequate liquidity), dispose of assets, or make distributions to stockholders; or

• increase our costs of capital.

Under the agreements governing our outstanding borrowings, we may incur additional borrowings. If new borrowings are added to our existing borrowing levels, the related risks that we now face would increase. In addition, at the time that any of our outstanding borrowings or new borrowings mature, we may not be able to refinance such borrowings or have the funds to pay them off.

Furthermore, some of our anticipated debt will bear interest at variable rates. If market interest rates increase, the interest rate on our variable rate borrowings will increase and will create higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations. While we may enter into agreements limiting our exposure to higher debt service requirements, any such agreements may not offer complete protection from this risk.

The Mergers and the other transactions contemplated by the Merger Agreement are subject to approval by common stockholders of SSGT.

In order for the Mergers to be completed, SSGT’s stockholders must approve the REIT Merger and the other transactions contemplated by the Merger Agreement, which requires the affirmative vote of holders of a majority of the outstanding shares of SSGT’s common stock at the special meeting of SSGT’s stockholders. If this required vote is not obtained by April 1, 2019, the Mergers may not be consummated.

There may be unexpected delays in the consummation of the Mergers.

The Mergers are expected to close during the first quarter of 2019, assuming that all of the conditions in the Merger Agreement are satisfied or waived. The Merger Agreement provides that either we or SSGT may terminate the Merger Agreement if the REIT Merger has not occurred by April 1, 2019. Certain events may delay the consummation of the Mergers. Some of the events that could delay the consummation of the Mergers include difficulties in obtaining the approval of the SSGT stockholders, or satisfying the other closing conditions to which the Mergers are subject.

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We may incur adverse tax consequences if SSGT has failed or fails to qualify as a REIT for U.S. federal income tax purposes.

If SSGT has failed or fails to qualify as a REIT for U.S. federal income tax purposes and the Mergers are completed, we may inherit significant tax liabilities and could lose our REIT status should disqualifying activities continue after the Mergers.

Following the Mergers, the Combined Company (defined below) may be unable to integrate our business and SSGT’s business successfully and realize the anticipated economies of scale and other benefits of the Mergers or do so within the anticipated timeframe.

The Mergers involve the combination of two public companies that currently operate independently of one another. The company following the Mergers (the “Combined Company”) is expected to benefit from the elimination of duplicative costs associated with supporting a public reporting company. However, the Combined Company will be required to devote significant management attention and resources to integrating the business practices and operations of us and SSGT. Potential difficulties the Combined Company may encounter in the integration process include the following:

• the inability to successfully combine our business and SSGT’s business in a manner that permits the Combined Company to achieve the cost savings anticipated to result from the Mergers, which would result in the anticipated benefits of the Mergers not being realized in the timeframe currently anticipated or at all;

• potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Mergers; or

• performance shortfalls as a result of the diversion of management’s attention caused by completing the Mergers and integrating the companies’ operations.

For all these reasons, you should be aware that it is possible that the integration process could result in the distraction of the Combined Company’s management, the disruption of the Combined Company’s ongoing business or inconsistencies in the Combined Company’s operations, services, standards, controls, procedures and policies, any of which could adversely affect the ability of the Combined Company to maintain relationships with customers and employees of the sponsor or to achieve the anticipated benefits of the Mergers, or could otherwise adversely affect the business and financial results of the Combined Company. In addition, certain of the foregoing difficulties may have a material adverse effect on the Combined Company’s business, e.g., if the Combined Company does not identify certain unknown liabilities or expenses, or underestimates the amount of such liabilities or expenses.

Strategic Transfer Agent Services, LLC, our Transfer Agent, has a limited operating history and a failure by our Transfer Agent to perform its functions for us effectively may adversely affect our operations.

Our Transfer Agent is a related party which was recently launched as a new business. While it is a registered transfer agent with the SEC, the business was formed on October 21, 2017 and has not had any significant operations to date. Because of its limited experience, there is no assurance that our Transfer Agent will be able to effectively provide transfer agent and registrar services to us. Furthermore, our Transfer Agent will be responsible for supervising third party service providers who may, at times, be responsible for executing certain transfer agent and registrar services. If our Transfer Agent fails to perform its functions for us effectively, our operations may be adversely affected.

Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

 Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders with respect to our Company, our directors, our officers, or our employees (we note we currently have no employees). This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is favorable for disputes with us or our directors, officers, or employees, which may discourage meritorious claims from being asserted against us and our directors, officers, and employees. Alternatively, if a court were to find this provision of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) None.

(b) None.

(c) Our share redemption program enables our stockholders to have their shares redeemed by us, subject to the significant conditions and limitations described in our prospectus. As of September 30, 2018, approximately $29.6 million of common stock was available for redemption and $4.6 million was included in accrued expenses and other liabilities in the consolidated balance sheets as of September 30, 2018.  During the three months ended September 30, 2018, we redeemed shares as follows:

For the Month Ended	Total Number of Shares Redeemed		Average Price Paid per Share		Total Number of Shares Redeemed as Part of Publicly Announced Plans or Programs		Maximum Number of Shares (or Units) That May Yet to be Purchased Under the Plans or Programs
July 31, 2018		129,214	$	9.41		129,214	2,549,814(1)
August 31, 2018		-	$	-		-	2,549,814(1)
September 30, 2018		-	$	-		-	2,549,814(1)

⁽¹⁾ A description of the maximum number of shares that may be purchased under our share redemption program is included in the narrative preceding this table.

ITEM  3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM  5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits required to be filed with this report are set forth on the Exhibit Index hereto and incorporated by
reference herein.

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EXHIBIT INDEX

The following exhibits are included in this report on Form 10-Q for the period ended September 30, 2018 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
2.1	Agreement and Plan of Merger, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K, filed on October 2, 2018, Commission File No. 000-55617
3.1	First Articles of Amendment and Restatement of Strategic Storage Trust II, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed on March 31, 2014, Commission File No. 333-190983
3.2	Articles of Amendment of Strategic Storage Trust II, Inc., incorporated by reference to Exhibit 3.1 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11, filed on September 28, 2015, Commission File No. 333-190983
3.3	Articles Supplementary of Strategic Storage Trust II, Inc., incorporated by reference to Exhibit 3.2 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11, filed on September 28, 2015, Commission File No. 333-190983
3.4	Bylaws of Strategic Storage Trust II, Inc., incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11, filed on September 4, 2013, Commission File No. 333-190983
3.5	Amendment No. 1 to the Amended and Restated Bylaws, incorporated by reference for Exhibit 3.1 to the Company’s Form 8-K, filed on August 6, 2018, Commission File No. 000-55617
4.1	Distribution Reinvestment Plan Enrollment Form (included as Appendix A to prospectus), incorporated by reference to the Company’s Registration Statement on Form S-3, filed on November 30, 2016, Commission File No. 333-214848
4.2	Second Amended and Restated Distribution Reinvestment Plan (included as Appendix B to prospectus), incorporated by reference to the Company’s Registration Statement on Form S-3, filed on November 30, 2016, Commission File No. 333-214848
10.1*	Amendment No. 3 to the Second Amended and Restated Limited Partnership Agreement of Strategic Storage Operating Partnership II, L.P.
10.2	Loan Agreement, dated October 11, 2018, incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K, filed on October 17, 2018, Commission File No. 000-55617
10.3	Limited Recourse Guaranty, dated October 11, 2018, incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K, filed on October 17, 2018, Commission File No. 000-55617
10.4	Third Amendment to Amended and Restated Credit Agreement, dated October 29, 2018, incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K, filed on November 2, 2018, Commission File No. 000-55617
31.1*	Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following Strategic Storage Trust II, Inc. financial information for the three and nine months ended September 30, 2018 formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss (iv) Consolidated Statement of Equity, (v) Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STRATEGIC STORAGE TRUST II, INC. (Registrant)
Dated: November 13, 2018	By:	/s/ Matt F. Lopez
		Matt F. Lopez
		Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

58

EX-10.1

Exhibit 10.1

AMENDMENT NO. 3 TO THE SECOND AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT

OF

STRATEGIC STORAGE OPERATING PARTNERSHIP II, L.P.

In accordance with Article 11 of the Second Amended and Restated Limited Partnership Agreement dated November 3, 2014 (the “Partnership Agreement”) of Strategic Storage Operating Partnership II, L.P. (the “Partnership”), the Partnership Agreement is hereby amended by this Amendment No. 3 thereto (this “Amendment”) to revise certain definitions in connection with the incentive provisions in Section 5.2 of the Partnership Agreement.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Partnership Agreement.

WHEREAS, the Partnership Agreement has previously been amended by Amendment No. 1 dated November 3, 2014 (“Amendment No. 1”), which established a series of up to 2,600,000 Preferred Units of the Partnership, and Amendment No. 2 dated September 28, 2015 (“Amendment No. 2”), which implemented certain changes in share classification for Strategic Storage Trust II, Inc. (the “General Partner”);

WHEREAS, Sections 5.2(c) and 5.2(e) of the Partnership Agreement provide for incentive distributions payable to the Special Limited Partner under certain circumstances which were intended to be equivalent to the Net Sale Proceeds payable to the Special Limited Partner pursuant to Section 5.2(b) of the Partnership Agreement;

WHEREAS, the calculation of the Subordinated Incentive Listing Distribution and Subordinated Distribution Due Upon Extraordinary Transaction do not currently operate in a manner consistent with the calculation of Net Sale Proceeds;

WHEREAS, the definition of Termination used in connection with Section 5.2(b) of the Partnership Agreement should be revised to include a non-renewal of the Advisory Agreement consistent with the disclosures contained in the Offering prospectus;

WHEREAS, the parties hereto desire to revise the definitions of Subordinated Distribution Due Upon Extraordinary Transaction, Subordinated Incentive Listing Distribution and Termination by entering into this Amendment.

NOW THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Section 1.  Amendments to Defined Terms

The following definitions are hereby revised and restated defined terms in the Partnership Agreement:

Subordinated Distribution Due Upon Extraordinary Transaction means 15% of the amount by which (i) the Transaction Amount (plus the amount payable pursuant to Section 5.2(e) hereof), plus the total of all Distributions paid to Common Stockholders (excluding any stock dividends and Distributions paid on REIT Shares redeemed by the General Partner) from the General Partner’s inception until the date that Transaction Amount is determined, exceeds (ii) the sum of (A) Invested Capital and (B) the total Distributions required to be paid to Common Stockholders in order to pay the Stockholders’ 6% Return from inception through the date Transaction Amount is determined.

Subordinated Incentive Listing Distribution means 15% of the amount by which (i) the Market Value (plus the amount payable pursuant to Section 5.2(c) hereof), plus the total of all Distributions paid to Common Stockholders (excluding any stock dividends and Distributions paid on REIT Shares redeemed by the General Partner) from the General Partner’s inception until the date that Market Value is determined, exceeds (ii) the sum of (A) Invested Capital

1

and (B) the total Distributions required to be paid to Common Stockholders in order to pay the Stockholders’ 6% Return from inception through the date Market Value is determined.  

Termination means the termination or non-renewal of the Advisory Agreement.

Section 2.  Continuation of Partnership Agreement

The Partnership Agreement, Amendment No. 1, Amendment No. 2 and this Amendment shall be read together and shall have the same force and effect as if the provisions of the Partnership Agreement, Amendment No. 1, Amendment No. 2 and this Amendment were contained in one document.  Any provisions of the Partnership Agreement not amended by Amendment No. 1, Amendment No. 2 or this Amendment shall remain in full force and effect as provided in the Partnership Agreement immediately prior to the date hereof.  In the event of a conflict between the provisions of this Amendment and the Partnership Agreement, Amendment No. 1 and Amendment No. 2, the provisions of this Amendment shall control.

[Signature Page Follows.]

1

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Partnership Agreement as of the 20th day of September, 2018.

STRATEGIC STORAGE OPERATING PARTNERSHIP II, L.P.

By: Strategic Storage Trust II, Inc., its sole general partner

By: /s/ H. Michael Schwartz
Name: H. Michael Schwartz
Title: Chief Executive Officer

STRATEGIC STORAGE TRUST II, INC.

By: /s/ H. Michael Schwartz
Name: H. Michael Schwartz
Title: Chief Executive Officer

2

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, H. Michael Schwartz, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Strategic Storage Trust II, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 13, 2018	By:	/s/ H. Michael Schwartz
		H. Michael Schwartz
		Chief Executive Officer and Director
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Matt F. Lopez, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Strategic Storage Trust II, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 13, 2018	By:	/s/ Matt F. Lopez
		Matt F. Lopez
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Strategic Storage Trust II, Inc. (the “Company”), in connection with the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018 (the “Report”) hereby certifies, to his knowledge, that:

(i) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2018	By:	/s/ H. Michael Schwartz
		H. Michael Schwartz
		Chief Executive Officer and Director
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Strategic Storage Trust II, Inc. (the “Company”), in connection with the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018 (the “Report”) hereby certifies, to his knowledge, that:

(i) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2018	By:	/s/ Matt F. Lopez
		Matt F. Lopez
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 12, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	ck0001585389
Entity Registrant Name	STRATEGIC STORAGE TRUST II, INC.
Entity Central Index Key	0001585389
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Small Business	false
Class A Common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		49,733,630
Class T Common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		7,500,273

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Real estate facilities:
Land	$ 271,343,323	$ 272,313,395
Buildings	512,294,410	514,648,107
Site improvements	43,065,688	42,717,975
Real estate investment property, gross	826,703,421	829,679,477
Accumulated depreciation	(49,609,050)	(34,686,973)
Real estate investment property	777,094,371	794,992,504
Construction in process	109,907	92,519
Real estate facilities, net	777,204,278	795,085,023
Cash and cash equivalents	3,739,371	7,355,422
Restricted cash	5,331,656	4,512,990
Other assets, net	11,889,921	5,563,600
Debt issuance costs, net of accumulated amortization	194,957	836,202
Intangible assets, net of accumulated amortization	1,675,543	4,144,601
Total assets	800,035,726	817,497,838
LIABILITIES AND EQUITY
Debt, net	395,909,178	396,792,902
Accounts payable and accrued liabilities	13,047,848	7,451,849
Due to affiliates	2,762,261	2,965,904
Distributions payable	2,801,394	2,852,100
Total liabilities	414,520,681	410,062,755
Commitments and contingencies (Note 8)
Redeemable common stock	29,559,784	24,497,059
Equity:
Preferred stock, $0.001 par value; 200,000,000 shares authorized; none issued and outstanding at September 30, 2018 and December 31, 2017	0	0
Additional paid-in capital	496,325,862	496,287,890
Distributions	(85,669,907)	(60,561,504)
Accumulated deficit	(61,181,459)	(58,641,776)
Accumulated other comprehensive income	2,243,511	1,369,208
Total Strategic Storage Trust II, Inc. equity	351,775,583	378,510,555
Noncontrolling interests in our Operating Partnership	4,179,678	4,427,469
Total equity	355,955,261	382,938,024
Total liabilities and equity	800,035,726	817,497,838
Class A Common stock
Equity:
Common stock, value	50,091	49,386
Class T Common stock
Equity:
Common stock, value	$ 7,485	$ 7,351

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Preferred Stock, par value	$ 0.001	$ 0.001	$ 0.001
Preferred Stock, shares authorized	200,000,000	200,000,000	200,000,000
Preferred Stock, shares issued		0	0
Preferred Stock, shares outstanding		0	0
Class A Common stock
Common Stock, par value	$ 0.001		$ 0.001
Common Stock, shares authorized	350,000,000		350,000,000
Common Stock, shares issued	50,090,692		49,386,092
Common Stock, shares outstanding	50,090,692		49,386,092
Class T Common stock
Common Stock, par value	$ 0.001		$ 0.001
Common Stock, shares authorized	350,000,000		350,000,000
Common Stock, shares issued	7,484,880		7,350,142
Common Stock, shares outstanding	7,484,880		7,350,142

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Self storage rental revenue	$ 19,796,139	$ 19,804,298	$ 58,784,034	$ 56,356,871
Ancillary operating revenue	516,930	135,214	1,441,008	366,963
Total revenues	20,313,069	19,939,512	60,225,042	56,723,834
Operating expenses:
Property operating expenses	6,416,687	6,456,088	18,637,792	18,358,466
Property operating expenses – affiliates	2,571,670	3,307,619	7,687,183	8,145,469
General and administrative	999,439	762,642	3,632,649	2,642,433
Depreciation	5,097,944	5,145,952	15,245,530	14,865,271
Intangible amortization expense	179,613	3,525,476	2,398,378	11,026,239
Acquisition expenses—affiliates	16,422		42,642	212,577
Other property acquisition expenses	554,661		808,091	292,022
Total operating expenses	15,836,436	19,197,777	48,452,265	55,542,477
Operating income	4,476,633	741,735	11,772,777	1,181,357
Other income (expense):
Interest expense	(4,587,573)	(4,310,132)	(13,417,041)	(11,979,432)
Interest expense—accretion of fair market value of secured debt	111,383	113,718	336,894	231,388
Interest expense—debt issuance costs	(330,639)	(329,877)	(975,591)	(1,849,114)
Other	(127,082)	(90,608)	(278,694)	(219,334)
Net loss	(457,278)	(3,875,164)	(2,561,655)	(12,635,135)
Net loss attributable to the noncontrolling interests in our Operating Partnership	5,854	34,389	21,972	100,585
Net loss attributable to Strategic Storage Trust II, Inc. common stockholders	$ (451,424)	$ (3,840,775)	$ (2,539,683)	$ (12,534,550)
Class A Common stock
Other income (expense):
Net loss per share-basic and diluted	$ (0.01)	$ (0.07)	$ (0.04)	$ (0.22)
Weighted average shares outstanding-basic and diluted	49,948,074	48,958,361	49,732,757	48,609,924
Class T Common stock
Other income (expense):
Net loss per share-basic and diluted	$ (0.01)	$ (0.07)	$ (0.04)	$ (0.22)
Weighted average shares outstanding-basic and diluted	7,461,101	7,281,358	7,418,129	7,212,753

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Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (457,278)	$ (3,875,164)	$ (2,561,655)	$ (12,635,135)
Other comprehensive income (loss):
Foreign currency translation adjustment	1,343,451	3,083,732	(2,061,322)	4,446,136
Foreign currency forward contract gains (losses)	(1,083,267)	(3,087,699)	2,431,232	(4,546,081)
Interest rate swap and cap contract gains (losses)	(5,139)	156,426	504,393	74,362
Other comprehensive income (loss)	255,045	152,459	874,303	(25,583)
Comprehensive loss	(202,233)	(3,722,705)	(1,687,352)	(12,660,718)
Comprehensive loss attributable to noncontrolling interests:
Comprehensive loss attributable to the noncontrolling interests in our Operating Partnership	2,589	33,036	14,473	100,789
Comprehensive loss attributable to Strategic Storage Trust II, Inc. common stockholders	$ (199,644)	$ (3,689,669)	$ (1,672,879)	$ (12,559,929)

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Consolidated Statement of Equity (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($)	Total	Redeemable Common Stock	Common Stock Class A Common stock	Common Stock Class T Common stock	Additional Paid-in Capital [Member]	Distributions [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]	Total Strategic Storage Trust II, Inc. Equity [Member]	Noncontrolling Interests in our Operating Partnership [Member]
Beginning Balance at Dec. 31, 2017	$ 382,938,024	$ 24,497,059	$ 49,386	$ 7,351	$ 496,287,890	$ (60,561,504)	$ (58,641,776)	$ 1,369,208	$ 378,510,555	$ 4,427,469
Beginning Balance (in shares) at Dec. 31, 2017			49,386,092	7,350,142
Offering costs	(15,364)	0	$ 0	$ 0	(15,364)	0	0	0	(15,364)	0
Changes to redeemable common stock	(12,041,524)	12,041,524	0	0	(12,041,524)	0	0	0	(12,041,524)	0
Redemptions of common stock	$ (324)	(6,978,799)	$ (305)	$ (19)	0	0	0	0	(324)	0
Redemptions of common stock (in shares)	(700,000)		(304,672)	(18,515)
Issuance of restricted stock	$ 11	0	$ 11	$ 0	0	0	0	0	11	0
Issuance of restricted stock (in shares)			10,500
Distributions	(25,108,403)	0	$ 0	0	0	(25,108,403)	0	0	(25,108,403)	0
Distributions to noncontrolling interests	(225,819)	0	0	0	0	0	0	0	0	(225,819)
Issuance of shares for distribution reinvestment plan	12,042,676	0	$ 999	$ 153	12,041,524	0	0	0	12,042,676	0
Issuance of shares for distribution reinvestment plan (in shares)			998,772	153,253
Stock compensation expense	53,336	0	$ 0	$ 0	53,336	0	0	0	53,336	0
Net loss attributable to Strategic Storage Trust II, Inc.	(2,539,683)	0	0	0	0	0	(2,539,683)	0	(2,539,683)	0
Net loss attributable to the noncontrolling interests in our Operating Partnership	(21,972)	0	0	0	0	0	0	0	0	(21,972)
Foreign currency translation adjustment	(2,061,322)	0	0	0	0	0	0	(2,061,322)	(2,061,322)	0
Foreign currency forward contract gains	2,431,232	0	0	0	0	0	0	2,431,232	2,431,232	0
Interest rate swap and cap contract gains	504,393	0	0	0	0	0	0	504,393	504,393	0
Ending Balance at Sep. 30, 2018	$ 355,955,261	$ 29,559,784	$ 50,091	$ 7,485	$ 496,325,862	$ (85,669,907)	$ (61,181,459)	$ 2,243,511	$ 351,775,583	$ 4,179,678
Ending Balance (in shares) at Sep. 30, 2018			50,090,692	7,484,880

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net loss	$ (2,561,655)	$ (12,635,135)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	17,643,908	25,891,510
Accretion of fair market value adjustment of secured debt	(336,894)	(231,388)
Amortization of debt issuance costs	975,591	1,096,071
Expense related to issuance of restricted stock	53,336	21,347
Unrealized derivative gains	(21,779)	0
Increase (decrease) in cash from changes in assets and liabilities:
Other assets, net	(1,244,202)	(2,563,309)
Accounts payable and accrued liabilities	1,561,727	3,985,234
Due to affiliates	304,265	117,085
Net cash provided by operating activities	16,374,297	15,681,415
Cash flows from investing activities:
Purchase of real estate	0	(49,432,644)
Additions to real estate	(1,112,143)	(2,797,888)
Investment in Joint Venture	(3,174,033)	0
Settlement of foreign currency hedges	2,132,261	(4,072,790)
Net cash used in investing activities	(2,153,915)	(56,303,322)
Cash flows from financing activities:
Gross proceeds from issuance of debt	5,000,000	166,186,951
Pay down of debt	(2,200,000)	(127,671,050)
Scheduled principal payments on debt	(1,603,805)	(1,109,798)
Debt issuance costs	(163,820)	(528,744)
Prepaid debt issuance costs	(1,075,000)	0
Gross proceeds from issuance of common stock	0	18,879,430
Offering costs	(526,598)	(2,152,888)
Redemption of common stock	(3,064,408)	(1,085,756)
Distributions paid to common stockholders	(13,115,607)	(12,425,167)
Distributions paid to noncontrolling interests in our Operating Partnership	(226,646)	(177,398)
Net cash provided by (used in) financing activities	(16,975,884)	39,915,580
Impact of foreign exchange rate changes on cash and restricted cash	(41,883)	230,116
Change in cash, cash equivalents, and restricted cash	(2,797,385)	(476,211)
Cash, cash equivalents, and restricted cash beginning of period	11,868,412	18,034,805
Cash, cash equivalents, and restricted cash end of period	9,071,027	17,558,594
Supplemental disclosures and non-cash transactions:
Cash paid for interest	13,534,949	11,694,161
Supplemental disclosure of noncash activities:
Deposits applied to purchase of real estate facilities	0	250,000
Debt and accrued liabilities assumed during purchase of real estate facilities	0	39,967,786
Prepaid debt issuance costs included in accounts payable and accrued liabilities	155,439	0
Additions to real estate and construction in process included in accounts payable	65,160	0
Redemption of common stock included in accounts payable and accrued liabilities	4,638,448	646,796
Transfer of construction in process to real estate facilities	0	1,782,546
Offering costs included in due to affiliates	0	299,299
Foreign currency contracts, interest rate swaps, and interest rate cap contract in accounts payable and accrued liabilities and other assets	735,942	574,120
Issuance of shares pursuant to distribution reinvestment plan	12,042,676	11,988,010
Distributions payable	2,801,394	2,743,955
Issuance of units in our Operating Partnership for purchase of real estate facilities	$ 0	$ 4,875,454

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Organization

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Organization

Note 1. Organization

Strategic Storage Trust II, Inc., a Maryland corporation (the “Company”), was formed on January 8, 2013 under the Maryland General Corporation Law for the purpose of engaging in the business of investing in self storage facilities. The Company’s year-end is December 31. As used in this report, “we,” “us,” “our,” and “Company” refer to Strategic Storage Trust II, Inc. and each of our subsidiaries.

SmartStop Asset Management, LLC, a Delaware limited liability company (our “Sponsor”) organized in 2013, was the sponsor of our Offering of shares of our common stock, as described below. Our Sponsor is a company focused on providing real estate advisory, asset management, and property management services. Our Sponsor owns 97.5% of the economic interests (and 100% of the voting membership interests) of Strategic Storage Advisor II, LLC (our “Advisor”) and owns 100% of Strategic Storage Property Management II, LLC (our “Property Manager”).

On October 1, 2015, SmartStop Self Storage, Inc. (“SmartStop”) and Extra Space Storage Inc. (“Extra Space”), along with subsidiaries of each of SmartStop and Extra Space, closed on a merger transaction (the “Extra Space Merger”) in which SmartStop was acquired by Extra Space for $13.75 per share in cash, representing an enterprise value of approximately $1.4 billion. At the closing of the Extra Space Merger, our Sponsor, which was previously owned by SmartStop, was sold to an entity controlled by H. Michael Schwartz, our Chairman of the Board of Directors and Chief Executive Officer, and became our Sponsor. The former executive management team of SmartStop continued to serve on the executive management team for our Sponsor. In addition, the majority of our management team at the time of the Extra Space Merger continues to serve on our management team, as well as the management team of our Advisor and Property Manager.

We have no employees. Our Advisor, a Delaware limited liability company, was formed on January 8, 2013. Our Advisor is responsible for managing our affairs on a day-to-day basis and identifying and making acquisitions and investments on our behalf under the terms of the advisory agreement we have with our Advisor (our “Advisory Agreement”). The officers of our Advisor, as well as a majority of the officers of our Sponsor, are also officers of us.

Our Articles of Amendment and Restatement, as amended, authorized 350,000,000 shares of Class A common stock, $0.001 par value per share (the “Class A Shares”) and 350,000,000 shares of Class T common stock, $0.001 par value per share (the “Class T Shares”) and 200,000,000 shares of preferred stock with a par value of $0.001. We offered a maximum of $1.0 billion in common shares for sale to the public (the “Primary Offering”) and $95.0 million in common shares for sale pursuant to our distribution reinvestment plan (collectively, the “Offering”).

On January 10, 2014, the Securities and Exchange Commission (“SEC”) declared our registration statement effective. On May 23, 2014, we satisfied the $1.5 million minimum offering requirements of our Offering and commenced formal operations. On January 9, 2017, our Offering terminated. We sold approximately 48 million Class A Shares and approximately 7 million Class T Shares for approximately $493 million and $73 million respectively, in our Offering. On November 30, 2016, prior to the termination of our Offering, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $100.9 million in shares under our distribution reinvestment plan (our “DRP Offering”). The DRP Offering may be terminated at any time upon 10 days’ prior written notice to stockholders. As of September 30, 2018, we had sold approximately 2.4 million Class A Shares and approximately 0.4 million Class T Shares for approximately $24.3 million and $3.7 million, respectively, in our DRP Offering.

We invested the net proceeds from our Offering primarily in self storage facilities. As of September 30, 2018, we owned 83 self storage facilities located in 14 states (Alabama, California, Colorado, Florida, Illinois, Indiana, Maryland, Michigan, New Jersey, Nevada, North Carolina, Ohio, South Carolina and Washington) and Canada (the Greater Toronto Area).

On April 19, 2018, our board of directors, upon recommendation of our Nominating and Corporate Governance Committee, approved an estimated value per share of our common stock of $10.65 for our Class A Shares and Class T Shares 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 a fully diluted basis, calculated as of December 31, 2017.

As a result of the calculation of our estimated value per share, beginning in May 2018, shares sold pursuant to our distribution reinvestment plan are being sold at the estimated value per share of $10.65 for both Class A Shares and Class T Shares.

Our operating partnership, Strategic Storage Operating Partnership II, L.P., a Delaware limited partnership (our “Operating Partnership”), was formed on January 9, 2013. During 2013, our Advisor purchased limited partnership interests in our Operating Partnership for $200,000 and on August 2, 2013, we contributed the initial $1,000 capital contribution we received to our Operating Partnership in exchange for the general partner interest. In conjunction with the Toronto Merger (as defined in Note 7) we issued an aggregate of approximately 483,197 Class A Units of our Operating Partnership to the common stockholders of Strategic Storage Toronto Properties REIT, Inc. (“SS Toronto”), consisting of Strategic 1031, LLC (“Strategic 1031”), a subsidiary of our Sponsor, and SS Toronto REIT Advisors, Inc., an affiliate of our Sponsor. Our Operating Partnership owns, directly or indirectly through one or more special purpose entities, all of the self storage properties that we acquire. As of September 30, 2018, we owned approximately 99.1% of the common units of limited partnership interests of our Operating Partnership. The remaining approximately 0.9% of the common units are owned by our Advisor, Strategic 1031, and SS Toronto REIT Advisors, Inc. As the sole general partner of our Operating Partnership, we have the exclusive power to manage and conduct the business of our Operating Partnership. We conduct certain activities through our taxable REIT subsidiary, Strategic Storage TRS II, Inc., a Delaware corporation (the “TRS”), which is a wholly-owned subsidiary of our Operating Partnership.

Our Property Manager was formed on January 8, 2013 to manage our properties. Our Property Manager derives substantially all of its income from the property management services it performs for us. Our Property Manager may enter into sub-property management agreements with third party management companies and pay part of its management fee to such sub-property manager. From October 1, 2015 through September 30, 2017, our Property Manager contracted with Extra Space for Extra Space to serve as the sub-property manager for each of our properties located in the United States pursuant to separate sub-property management agreements for each property.  

On October 1, 2017, our Property Manager terminated its sub-property management agreements with Extra Space and our Property Manager began managing all of our properties in the United States directly. In connection therewith, an affiliate of our Property Manager reacquired the rights to the “SmartStop® Self Storage” brand in the United States. As a result, we began using the “SmartStop® Self Storage” brand at our United States properties effective October 1, 2017. Please see Note 7 – Related Party Transactions – Property Management Agreement.

All properties owned or acquired in Canada have been and will continue to be managed by a subsidiary of our Sponsor and are branded using the SmartStop® Self Storage brand.

Our dealer manager is Select Capital Corporation, a California corporation (our “Dealer Manager”). Our Dealer Manager was responsible for marketing our shares offered pursuant to our Primary Offering. Our Sponsor owns a 15% non-voting equity interest in our Dealer Manager. Affiliates of our Dealer Manager own a 2.5% non-voting membership interest in our Advisor.

Our Sponsor owns 100% of the membership interests of Strategic Transfer Agent Services, LLC, our transfer agent (our “Transfer Agent”). On May 31, 2018, the Company executed an agreement (the “Transfer Agent Agreement”), with our Transfer Agent to provide transfer agent and registrar services to us that are substantially similar to what a third party transfer agent would provide in the ordinary course of performing its functions as a transfer agent. Our Transfer Agent may retain and supervise third party vendors in its efforts to administer certain services. Please see Note 7 – Related Party Transactions – Transfer Agent Agreement.

As we accepted subscriptions for shares of our common stock, we transferred all of the net offering proceeds to our Operating Partnership as capital contributions in exchange for additional units of interest in our Operating Partnership. However, we were deemed to have made capital contributions in the amount of gross proceeds received from investors, and our Operating Partnership was deemed to have simultaneously paid the sales commissions and other costs associated with the Offering. In addition, our Operating Partnership is structured to make distributions with respect to limited partnership units that are equivalent to the distributions made to holders of common stock. Finally, a limited partner in our Operating Partnership may later exchange his or her limited partnership units in our Operating Partnership for shares of our common stock at any time after one year following the date of issuance of their limited partnership units, subject to certain restrictions outlined in our Operating Partnership’s limited partnership agreement (the “Operating Partnership Agreement”). Our Advisor is prohibited from exchanging or otherwise transferring its limited partnership units so long as it is acting as our Advisor pursuant to our Advisory Agreement.

On October 1, 2018, we, our Operating Partnership, and SST II Growth Acquisition, LLC, our wholly-owned subsidiary (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Strategic Storage Growth Trust, Inc. (“SSGT”), a non-traded REIT sponsored by our Sponsor, and SS Growth Operating Partnership, L.P. (“SSGT OP”).  Pursuant to the terms of the Merger Agreement, SSGT will merge with and into Merger Sub, with Merger Sub being the surviving entity (the “REIT Merger”), and immediately after the REIT Merger, SSGT OP will merge with and into our Operating Partnership, with our Operating Partnership continuing as the surviving entity and our subsidiary (the “Partnership Merger” and, together with the REIT Merger, the “Mergers”).  See Note 11, Potential Merger, for additional information related to the Mergers and other transactions contemplated by the Merger Agreement.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC.

Principles of Consolidation

Our financial statements, and the financial statements of our Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these entities not wholly-owned by us is presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated in consolidation.

Consolidation Considerations

Current accounting guidance provides a framework for identifying a variable interest entity (“VIE”) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and noncontrolling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. Our Operating Partnership is deemed to be a VIE and is consolidated by the Company as the primary beneficiary.

As of December 31, 2017, we had not entered into any other contracts/interests that would be deemed to be variable interests in VIEs other than our Operating Partnership.  As of September 30, 2018, we had not entered into any other contracts/interest that would be deemed to be variable interest in VIEs other than our tenant insurance joint venture and a real estate joint venture, both of which are accounted for under the equity method of accounting.  Please see Note 3 – Real Estate Facilities for further discussion regarding our joint venture with SmartCentres and Note 7 – Related Party Transactions for further discussions regarding our tenant insurance joint venture. Other than these joint ventures, we do not currently have any relationships with unconsolidated entities or financial partnerships.

Under the equity method, our investments in real estate joint ventures will be stated at cost and adjusted for our share of net earnings or losses and reduced by distributions. Equity in earnings of real estate joint ventures will generally be recognized based on our ownership interest in the earnings of each of the unconsolidated real estate joint ventures.

Noncontrolling Interest in Consolidated Entities

We account for the noncontrolling interest in our Operating Partnership in accordance with the related accounting guidance. Due to our control through our general partnership interest in our Operating Partnership and the limited rights of the limited partner, our Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company and the limited partner interest is reflected as a noncontrolling interest in the accompanying consolidated balance sheets. The noncontrolling interest shall be attributed its share of income and losses, even if that attribution results in a deficit noncontrolling interest balance.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Management will adjust such estimates when facts and circumstances dictate. Actual results could materially differ from those estimates. The most significant estimates made include the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed at relative fair value, the determination if certain entities should be consolidated, the evaluation of potential impairment of long-lived assets, and the estimated useful lives of real estate assets and intangibles.

Cash and Cash Equivalents

We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents.

We may maintain cash and cash equivalents in financial institutions in excess of insured limits, but believe this risk will be mitigated by only investing in or through major financial institutions.

Restricted Cash

Restricted cash consists primarily of impound reserve accounts for property taxes, insurance and capital improvements in connection with the requirements of certain of our loan agreements.

Real Estate Purchase Price Allocation

We account for acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values. This guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs as of the acquisition date.

The value of the tangible assets, consisting of land and buildings is determined as if vacant. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases are month-to-month contracts. We also consider whether in-place, market leases represent an intangible asset. We recorded $0 and approximately $4.4 million in intangible assets to recognize the value of in-place leases related to our acquisitions during the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively. We do not expect, nor to date have we recorded, intangible assets for the value of customer relationships because we expect we will not have concentrations of significant customers and the average customer turnover will be fairly frequent.

Allocation of purchase price to acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available.

In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework provides guidance for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. We adopted this ASU on January 1, 2018. We expect that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. As a result, once an acquisition is deemed probable, transaction costs are capitalized rather than expensed. We have yet to acquire any properties that require capitalization of acquisition related transaction costs that would have previously been expensed under the guidance in effect prior to January 1, 2018.

During the three months ended September 30, 2018 and 2017, we expensed approximately $0.6 million and none, respectively, of acquisition-related transaction costs that did not meet our capitalization policy during the respective periods. During the nine months ended September 30, 2018 and 2017, we expensed approximately $0.9 million and $0.5 million, respectively, of acquisition-related transaction costs that did not meet our capitalization policy during the respective periods.

Evaluation of Possible Impairment of Long-Lived Assets

Management monitors events and changes in circumstances that could indicate that the carrying amounts of our long-lived assets may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of the assets may not be recoverable, we will assess the recoverability of the assets by determining whether the carrying value of the long-lived assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, we will adjust the value of the long-lived assets to the fair value and recognize an impairment loss. For the three and nine months ended September 30, 2018 and 2017, no impairment losses were recognized.

Revenue Recognition

Management believes that all of our leases are operating leases. Rental income is recognized in accordance with the terms of the leases, which generally are month-to-month. Revenues from any long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents received over amounts contractually due pursuant to the underlying leases is included in accounts payable and accrued liabilities in our consolidated balance sheets and contractually due but unpaid rent is included in other assets.

Allowance for Doubtful Accounts

Tenant accounts receivable is reported net of an allowance for doubtful accounts. Management’s estimate of the allowance is based upon a review of the current status of tenant accounts receivable. It is reasonably possible that management’s estimate of the allowance will change in the future.

Real Estate Facilities

Real estate facilities are recorded based on relative fair value as of the date of acquisition. We capitalize costs incurred to develop, construct, renovate and improve properties, including interest and property taxes incurred during the construction period. The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress. The construction period ends when the asset is substantially complete and ready for its intended use.

Depreciation of Real Property Assets

Our management is required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives.

Depreciation of our real property assets is charged to expense on a straight-line basis over the estimated useful lives
as follows:

Description	Standard Depreciable Life
Land	Not Depreciated
Buildings	30-35 years
Site Improvements	7-10 years

Depreciation of Personal Property Assets

Personal property assets consist primarily of furniture, fixtures and equipment and are depreciated on a straight-line basis over the estimated useful lives generally ranging from 3 to 5 years, and are included in other assets on our consolidated balance sheets.

Intangible Assets

We have allocated a portion of our real estate purchase price to in-place lease intangibles. We are amortizing in-place lease intangibles on a straight-line basis over the estimated future benefit period. As of September 30, 2018, the gross amounts allocated to in-place lease intangibles was approximately $34 million and accumulated amortization of in-place lease intangibles totaled approximately $32 million. As of December 31, 2017, the gross amounts allocated to in-place lease intangibles was approximately $34 million and accumulated amortization of in-place lease intangibles totaled approximately $30 million.

The total estimated future amortization expense of intangible assets for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter is approximately $25,000, $0.1 million, $0.1 million, $0.1 million, $0.1 million, and $1.2 million respectively.

Debt Issuance Costs

The net carrying value of costs incurred in connection with our revolving credit facility are presented as debt issuance costs on our consolidated balance sheets. Debt issuance costs are amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. As of September 30, 2018 and December 31, 2017, accumulated amortization of debt issuance costs related to our revolving credit facility totaled approximately $2.1 million and $1.5 million, respectively.

The net carrying value of costs incurred in connection with obtaining non revolving debt are presented on the balance sheet as a deduction from debt (see Note 5). Debt issuance costs are amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. As of September 30, 2018 and December 31, 2017, accumulated amortization of debt issuance costs related to non-revolving debt totaled approximately $0.9 million and $0.6 million, respectively.

Offering Costs

We pay our Dealer Manager an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering. We will cease paying the stockholder servicing fee with respect to the Class T Shares sold in the Primary Offering at the earlier of (i) the date we list our shares on a national securities exchange, merge or consolidate with or into another entity, or sell or dispose of all or substantially all of our assets, (ii) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of both Class A Shares and Class T Shares in our Primary Offering (i.e., excluding proceeds from sales pursuant to our distribution reinvestment plan), which calculation shall be made by us with the assistance of our Dealer Manager commencing after the termination of the Primary Offering; (iii)  the fifth anniversary of the last day of the fiscal quarter in which our Primary Offering (i.e., excluding our distribution reinvestment plan offering) terminated; and (iv) the date that such Class T Share is redeemed or is no longer outstanding. Our Dealer Manager entered into participating dealer agreements with certain other broker-dealers which authorized them to sell our shares. Upon sale of our shares by such broker-dealers, our Dealer Manager re-allowed all of the sales commissions and, subject to certain limitations, the stockholder servicing fees paid in connection with sales made by these broker-dealers. Our Dealer Manager was also permitted to re-allow to these broker-dealers a portion of their dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by our Dealer Manager, payment of attendance fees required for employees of our Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. Our Dealer Manager also received reimbursement of bona fide due diligence expenses; however, to the extent the due diligence expenses could not be justified, any excess over actual due diligence expenses would have been considered underwriting compensation subject to a 10% FINRA limitation and, when aggregated with all other non-accountable expenses in connection with our Public Offering, could not exceed 3% of gross offering proceeds from sales in the Public Offering. We recorded a liability within Due to affiliates for the future estimated stockholder servicing fees at the time of sale of Class T Shares as an offering cost.

Foreign Currency Translation

For non-U.S. functional currency operations, assets and liabilities are translated to U.S. dollars at current exchange rates. Revenues and expenses are translated at the average rates for the period. All related adjustments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. Transactions denominated in a currency other than the functional currency of the related operation are recorded at rates of exchange in effect at the date of the transaction. Gains or losses on foreign currency transactions are recorded in other income (expense).

Redeemable Common Stock

We adopted a share redemption program that enables stockholders to sell their shares to us in limited circumstances.

We record amounts that are redeemable under the share redemption program as redeemable common stock in the accompanying consolidated balance sheets since the shares are redeemable at the option of the holder and therefore their redemption is outside our control. The maximum amount redeemable under our share redemption program is limited to the number of shares we can repurchase with the amount of the net proceeds from the sale of shares under the distribution reinvestment plan. However, accounting guidance states that determinable amounts that can become redeemable should be presented as redeemable when such amount is known. Therefore, the net proceeds from the distribution reinvestment plan are considered to be temporary equity and are presented as redeemable common stock in the accompanying consolidated balance sheets.

In addition, current accounting guidance requires, among other things, that financial instruments that represent a mandatory obligation of us to repurchase shares be classified as liabilities and reported at settlement value. Our redeemable common shares are contingently redeemable at the option of the holder. When we determine we have a mandatory obligation to repurchase shares under the share redemption program, we reclassify such obligations from temporary equity to a liability based upon their respective settlement values.

For the year ended December 31, 2017, we received redemption requests totaling approximately $2.2 million (approximately 0.2 million shares), approximately $1.5 million of which were fulfilled during the year ended December 31, 2017, with the remaining approximately $0.7 million included in accounts payable and accrued liabilities as of December 31, 2017 and fulfilled in January 2018.  For the nine months ended September 30, 2018, we received redemption requests totaling approximately $7.0 million (approximately 0.7 million shares), approximately $2.3 million of which were fulfilled in April and July of 2018, and approximately $4.6 million of which were included in accounts payable and accrued liabilities as of September 30, 2018, and fulfilled in October of 2018.

Accounting for Equity Awards

The cost of restricted stock is required to be measured based on the grant date fair value and the cost recognized over the relevant service period.

Fair Value Measurements

Under GAAP, we are required to measure certain financial instruments at fair value on a recurring basis. In addition, we are required to measure other financial instruments and balances at fair value on a non-recurring basis. Fair value is defined by the accounting standard for fair value measurements and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value we use when measuring fair value:

• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;

• Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as interest rates and yield curves that are observable at commonly quoted intervals; and

• Level 3 inputs are unobservable inputs for the assets or liabilities that are typically based on an entity’s own assumptions as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level that is significant to the fair value measurement in its entirety.

The accounting guidance for fair value measurements and disclosures provides a framework for measuring fair value and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In determining fair value, we will utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment will be necessary to interpret Level 2 and 3 inputs in determining fair value of our financial and non-financial assets and liabilities. Accordingly, there can be no assurance that the fair values we will present will be indicative of amounts that may ultimately be realized upon sale or other disposition of these assets.

Financial and non-financial assets and liabilities measured at fair value on a non-recurring basis in our consolidated financial statements consist of real estate and related liabilities assumed related to our acquisitions. The fair values of these assets and liabilities were determined as of the acquisition dates using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity. In general, we consider multiple valuation techniques when measuring fair values. However, in certain circumstances, a single valuation technique may be appropriate. All of the fair values of the assets and liabilities as of the acquisition dates were derived using Level 3 inputs.

The carrying amounts of cash and cash equivalents, restricted cash, other assets, variable-rate debt, accounts payable and accrued liabilities, distributions payable and amounts due to affiliates approximate fair value.

The table below summarizes our fixed rate notes payable at September 30, 2018 and December 31, 2017. The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of the fixed rate notes payable was estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented below are not necessarily indicative of the amounts we would realize in a current market exchange.

	September 30, 2018				December 31, 2017
	Fair Value		Carrying Value		Fair Value		Carrying Value
Fixed Rate Secured Debt	$	205,700,000	$	217,430,858	$	213,300,000	$	218,332,483

As of September 30, 2018, we had interest rate swaps, an interest rate cap, and a net investment hedge (See Notes 5 and 6). The valuations of these instruments were determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative. The analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair value of the interest rate swaps were determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash payments.  Our fair values of our net investment hedges are based on the change in the spot rate at the end of the period as compared with the strike price at inception.

To comply with GAAP, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of derivative contracts for the effect of non-performance risk, we will consider the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we had determined that the majority of the inputs used to value our derivatives were within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, through September 30, 2018, we had assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

We record all derivatives on our balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. We may enter into derivative contracts that are intended to economically hedge certain of our risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.

For derivatives designated as net investment hedges, the effective portion of changes in the fair value of the derivatives are reported in accumulated other comprehensive income. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts are reclassified out of other comprehensive income into earnings when the hedged net investment is either sold or substantially liquidated.

Income Taxes

We made an election to be taxed as a Real Estate Investment Trust (“REIT”), under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2014. To qualify as a REIT, we must continue to meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the REIT’s ordinary taxable income to stockholders (which is computed without regard to the dividends paid deduction or net capital gains and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the IRS grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for federal income tax purposes.

Even if we continue to qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income.

We filed an election to treat our TRS as a taxable REIT subsidiary effective January 1, 2014. In general, the TRS performs additional services for our customers and generally engages in any real estate or non-real estate related business. The TRS is subject to corporate federal and state income tax. The TRS follows accounting guidance which requires the use of the asset and liability method. Deferred income taxes represent the tax effect of future differences between the book and tax bases of assets and liabilities.

Per Share Data

Basic earnings per share attributable to our common stockholders for all periods presented are computed by dividing net income (loss) attributable to our common stockholders by the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed by including the dilutive effect of unvested restricted stock, utilizing the treasury stock method. For all periods presented, the dilutive effect of unrestricted stock was not included in the diluted weighted average shares as such shares were antidilutive.

Recently Issued Accounting Guidance

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” as ASC Topic 606. The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new standard, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. This ASU was applied using the modified retrospective approach. We have determined that our self storage rental revenues are not subject to the guidance in ASU 2014-09, as they qualify as lease contracts, which are excluded from its scope. We adopted this ASU on January 1, 2018 and its adoption did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 amends the guidance on accounting for leases. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02, lessor accounting is largely unchanged. It also includes extensive amendments to the disclosure requirements. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted for financial statements that have not yet been made available for issuance. ASU 2016-02 requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. While we continue to evaluate the standard, based upon our assessment to date, we do not anticipate the adoption of this standard will have a material impact on our consolidated financial statements, because substantially all of our lease revenues are derived from month-to-month leases.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 requires companies to include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and is applied retrospectively to all periods presented. We adopted this guidance on January 1, 2018 and have begun presenting restricted cash along with cash and cash equivalents in our consolidated statements of cash flows.  As a result of adopting the new guidance, approximately $1.7 million of restricted cash which was previously included as operating cash outflows, and approximately $0.7 million of restricted cash which was previously included as investing cash outflows within the consolidated statements of cash flows for the nine months ended September 30, 2017, have been removed and are now included in the cash, cash equivalents, and restricted cash line items at the beginning and end of the period.

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Real Estate Facilities

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

Real Estate Facilities

Note 3. Real Estate Facilities

The following summarizes the activity in real estate facilities during the nine months ended September 30, 2018:

Real estate facilities
Balance at December 31, 2017	$	829,679,477
Impact of foreign exchange rate changes		(4,135,139	)
Improvements and additions		1,159,083
Balance at September 30, 2018	$	826,703,421
Accumulated depreciation
Balance at December 31, 2017	$	(34,686,973	)
Depreciation expense		(15,060,835	)
Impact of foreign exchange rate changes		138,758
Balance at September 30, 2018	$	(49,609,050	)

Joint Venture with SmartCentres

In January 2018, a subsidiary of our Sponsor entered into a contribution agreement (the “Contribution Agreement”) with a subsidiary of SmartCentres Real Estate Investment Trust, an unaffiliated third party (“SmartCentres”), for a tract of land owned by SmartCentres and located in East York, Ontario (the “East York Lot”) in Canada. In March 2018, the interest in the Contribution Agreement was assigned to one of our subsidiaries.

On June 28, 2018, we closed on the East York Lot, which is now owned by a limited partnership (the “Limited Partnership”), in which we (through our subsidiary) and SmartCentres (through its subsidiary) are each a 50% limited partner and each have an equal ranking general partner in the Limited Partnership. At closing, we subscribed for 50% of the units in the Limited Partnership at an agreed upon subscription price of approximately $3.8 million CAD, representing a contribution equivalent to 50% of the agreed upon fair market value of the land. The Limited Partnership intends to develop a self storage facility on the East York Lot. The value of the land contributed to the Limited Partnership had an agreed upon fair market value of approximately $7.6 million CAD.

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Pro Forma Financial Information (Unaudited)

9 Months Ended

Sep. 30, 2018

Business Acquisition Pro Forma Information [Abstract]

Pro Forma Financial Information (Unaudited)

Note 4. Pro Forma Financial Information (Unaudited)

The table set forth below summarizes, on a pro forma basis, the combined results of operations of the Company for the nine months ended September 30, 2018 and 2017. Such presentation reflects the Company’s acquisitions that occurred during 2017, which met the GAAP definition of a business in effect at that time, as if the acquisitions had occurred as of January 1, 2016. However, for acquisitions of lease-up properties that were not operational as of these dates, the pro forma information includes these acquisitions as of the date that formal operations began. There were no acquisitions completed during the nine months ended September 30, 2018. This pro forma information does not purport to represent what the actual consolidated results of operations of the Company would have been for the periods indicated, nor does it purport to predict the results of operations for future periods.

	For the nine months ended
	September 30, 2018			September 30,  2017
Pro forma revenue	$	60,225,042		$	57,188,309
Pro forma operating expenses		(46,127,260	)		(45,442,165	)
Pro forma net loss attributable to common stockholders		(234,620	)		(2,291,516	)

The pro forma financial information for the nine months ended September 30, 2018 and 2017 was adjusted to exclude $0 and approximately $0.5 million, respectively, for acquisition related expenses.

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Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt

Note 5. Debt

The Company’s debt is summarized as follows:

Encumbered Property	September 30, 2018			December31, 2017			Interest Rate			Maturity Date
Raleigh/Myrtle Beach promissory note(1)	$	11,929,458		$	12,076,470			5.73	%	9/1/2023
Amended KeyBank Credit Facility(2)		89,182,500			86,382,500		4.76		%(11)	12/22/2018(13)
Milton fixed rate(3)		5,040,575			5,238,606			5.81	%	10/15/2018(12)
Burlington I fixed rate(3)		4,905,228			5,120,423			5.98	%	10/15/2018(12)
Burlington I variable rate(3)		2,336,370			2,402,418			5.97	%	10/15/2018(12)
Oakville I variable rate(3)		7,799,019			8,019,489			5.45	%	12/31/2018(12)
Burlington II and Oakville II variable rate(3)		12,286,742			12,834,819			4.34	%	2/28/2021(12)
Oakland and Concord loan(4)		19,604,712			19,960,190			3.95	%	4/10/2023
KeyBank CMBS Loan(5)		95,000,000			95,000,000			3.89	%	8/1/2026
KeyBank Florida CMBS Loan(6)		52,000,000			52,000,000			4.65	%	5/1/2027
$11M KeyBank Subordinate Loan(7)		11,000,000			11,000,000		6.01		%(11)	6/1/2020
Midland North Carolina CMBS Loan(8)		47,249,999			47,249,999			5.31	%	8/1/2024
Dufferin loan(9)		10,541,343			11,172,315			3.21	%	5/31/2019(12)
Mavis loan(9)		8,885,034			9,416,609			3.21	%	5/31/2019(12)
Brewster loan(9)		5,807,151			6,154,532			3.21	%	5/31/2019(12)
Granite variable rate loan(10)		6,906,378			7,101,614			6.45	%	12/1/2018(12)
Centennial variable rate loan(10)		6,202,444			6,377,780			6.70	%	12/1/2018(12)
Premium on secured debt, net		1,305,598			1,646,988
Debt issuance costs, net		(2,073,373	)		(2,361,850	)
Total debt	$	395,909,178		$	396,792,902

⁽¹⁾ Fixed rate debt with principal and interest payments due monthly. This promissory note is encumbered by five properties (Morrisville, Cary, Raleigh, Myrtle Beach I, and Myrtle Beach II).

⁽²⁾ As of September 30, 2018, this facility encumbers 21 properties (Xenia, Sidney, Troy, Greenville, Washington Court House, Richmond, Connersville, Vallejo, Port St. Lucie I, Sacramento, Sonoma, Las Vegas I, Las Vegas II, Las Vegas III, Baltimore, Aurora II, Plantation, Wellington, Naples, Port St. Lucie II, and Doral).

⁽³⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime, or the Canadian Dealer Offered Rate (“CDOR”).

⁽⁴⁾ This loan was assumed during the acquisition of the Oakland and Concord properties, along with an interest rate swap with USAmeriBank that fixes the interest rate at 3.95%.

⁽⁵⁾ This loan encumbers 29 properties (Whittier, La Verne, Santa Ana, Upland, La Habra, Monterey Park, Huntington Beach, Chico, Lancaster I, Riverside, Fairfield, Lompoc, Santa Rosa, Federal Heights, Aurora, Littleton, Bloomingdale, Crestwood, Forestville, Warren I, Sterling Heights, Troy, Warren II, Beverly, Everett, Foley, Tampa, Boynton Beach, and Lancaster II). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

⁽⁶⁾ This loan encumbers five properties (Pompano Beach, Lake Worth, Jupiter, Royal Palm Beach, and Delray). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

⁽⁷⁾ This variable rate loan encumbers 49% of the equity interest in the entities that own the 34 properties (the 29 properties encumbered by the KeyBank CMBS Loan and the five properties encumbered by the KeyBank Florida CMBS Loan), and is subordinate to the existing KeyBank CMBS Loan and KeyBank Florida CMBS Loan.

⁽⁸⁾ This loan encumbers 11 self storage properties (Asheville I, Arden, Asheville II, Hendersonville I, Asheville III, Asheville IV, Asheville V, Asheville VI, Asheville VII, Asheville VIII, and Hendersonville II) with monthly interest only payments until September 2019, at which time both interest and principal payments will be due monthly.

⁽⁹⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. These loans were assumed during the Toronto Merger, along with an interest rate swap with the Bank of Montreal that fixes the interest rate at 3.21%.

⁽¹⁰⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime.

⁽¹¹⁾ We have a $90 million interest rate cap on our variable rate LIBOR based debt that caps LIBOR at 1.25%. See Note 6.

⁽¹²⁾ Subsequent to September 30, 2018, these loans were paid off in full with the proceeds of a new, two year term loan with Citibank, N.A. See Note 12 for further discussion.

⁽¹³⁾ Subsequent to September 30, 2018, we amended and restated our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. See Note 12 for further discussion.

The weighted average interest rate on our consolidated debt as of September 30, 2018 was approximately 4.62%.

As of September 30, 2018, we provided recourse guarantees totaling approximately $42 million in connection with certain of our loans. We are subject to certain restrictive covenants relating to the outstanding debt.

Amended KeyBank Credit Facility

On December 22, 2015, we, through our Operating Partnership, and certain affiliated entities entered into an amended and restated revolving credit facility (the “Amended KeyBank Credit Facility”) with KeyBank National Association (“KeyBank”), as administrative agent and KeyBanc Capital Markets, LLC, as the sole book runner and sole lead arranger, and Texas Capital Bank, N.A., and Comerica Bank as co-lenders.

Under the terms of the Amended KeyBank Credit Facility, we initially had a maximum borrowing capacity of $105 million. The Amended KeyBank Credit Facility may be increased to a maximum credit facility size of $500 million, in minimum increments of $10 million, which KeyBank will arrange on a best efforts basis.

On February 18, 2016, we entered into a first amendment and joinder to the amended and restated credit agreement (the “First Amendment”) with KeyBank. Under the terms of the First Amendment, we added an additional $40 million to our maximum borrowing capacity for a total of $145 million with the admission of US Bank National Association (the “Subsequent Lender”). The Subsequent Lender also became a party to the Amended KeyBank Credit Facility through a joinder agreement in the First Amendment. As of September 30, 2018, we had approximately $89.2 million in borrowings outstanding under the Amended KeyBank Credit Facility.

The Amended KeyBank Credit Facility is a revolving loan with an initial term of three years, maturing on December 22, 2018, with two one-year extension options subject to certain conditions outlined further in the credit agreement for the Amended KeyBank Credit Facility (the “Amended Credit Agreement”). On October 29, 2018, we amended and restated our Amended KeyBank Credit Facility, extending the maturity date to February 20, 2019. See Note 12 - Subsequent Events. Payments due pursuant to the Amended KeyBank Credit Facility are interest-only for the first 36 months and a 30-year amortization schedule thereafter. The Amended KeyBank Credit Facility bears interest based on the type of borrowing. The ABR Loans bear interest at the lesser of (x) the Alternate Base Rate (as defined in the Amended Credit Agreement) plus the Applicable Rate, or (y) the Maximum Rate (as defined in the Amended Credit Agreement). The Eurodollar Loans bear interest at the lesser of (a) the Adjusted LIBO Rate (as defined in the Amended Credit Agreement) for the Interest Period in effect plus the Applicable Rate, or (b) the Maximum Rate (as defined in the Amended Credit Agreement). The Applicable Rate corresponds to our total leverage, as specified in the Amended Credit Agreement. For any ABR Loans, the Applicable Rate is 125 basis points if our total leverage is less than 50%, and 150 basis points if our leverage is greater than 50%. For any Eurodollar Loan, the Applicable Rate is 225 basis points if our total leverage is less than 50% and 250 basis points if our total leverage is greater than 50%.

The Amended KeyBank Credit Facility is fully recourse and is secured by cross-collateralized first mortgage liens on the mortgaged properties. The Amended KeyBank Credit Facility may be prepaid or terminated at any time without penalty, provided, however, that the Lenders (as defined in the Amended Credit Agreement) shall be indemnified for any breakage costs. Pursuant to that certain guaranty (the “KeyBank Guaranty”), dated December 22, 2015, in favor of the Lenders, we serve as a guarantor of all obligations due under the Amended KeyBank Credit Facility.

Under certain conditions, the Borrower may cause the release of one or more of the properties serving as collateral for the Amended KeyBank Credit Facility, provided that no default or event of default is then outstanding or would reasonably occur as a result of such release, and after taking into account any prepayment of outstanding Loans (as defined in the Amended Credit Agreement) necessary to maintain compliance with the financial covenants.

The Amended KeyBank Credit Facility contains a number of other customary terms and covenants, including the following (capitalized terms are as defined in the Amended Credit Agreement): the aggregate borrowing base availability under the Amended KeyBank Facility is limited to the lesser of: (1) 60% of the Pool Value of the properties in the collateral pool, or (2) an amount that would provide a minimum Debt Service Coverage Ratio of no less than 1.35 to 1.0; and we must meet the following financial tests, calculated as of the close of each fiscal quarter: (1) a Total Leverage Ratio of no more than 60%; (2) a Tangible Net Worth not at any time to be less than the Base Amount plus 80% of Net Equity Proceeds received after the Effective Date; (3) an Interest Coverage Ratio of no less than 1.85 to 1.0; (4) a Fixed Charge Ratio of no less than 1.6 to 1.0; (5) a ratio of varying rate Indebtedness to total Indebtedness not in excess of 30%; (6) a Loan to Value Ratio of not greater than 60%; and (7) a Debt Service Coverage Ratio of not less than 1.35 to 1.0. As of September 30, 2018, we were in compliance with all such covenants.

During 2017, our Operating Partnership purchased an interest rate cap with a notional amount of $90 million, with an effective date of July 1, 2017 that caps LIBOR at 1.25% through December 22, 2018.

The following table presents the future principal payment requirements on outstanding debt as of September 30, 2018:

2018	$	122,872,859		(1)
2019		26,139,333		(1)
2020		12,622,834		(1)
2021		13,684,085		(1)
2022		3,635,428
2023 and thereafter		217,722,414
Total payments		396,676,953
Premium on secured debt, net		1,305,598
Debt issuance costs, net		(2,073,373	)
Total	$	395,909,178

⁽¹⁾ On October 11, 2018, we repaid approximately $70.7 million of our Canadian debt with the proceeds from a new loan with Citibank. On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. Subsequent to these debt transactions, future principal payment requirements on our outstanding debt for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter are approximately $0.2 million, $90.1 million, $83.1 million, $2.0 million, $3.6 million, and $217.7 million, respectively. See Note 12 – Subsequent Events.

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Derivative Instruments

9 Months Ended

Sep. 30, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 6. Derivative Instruments

Interest Rate Derivatives

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we use interest rate swaps and caps as part of our interest rate risk management strategy. The effective portion of the change in the fair value of the derivative that qualifies as a cash flow hedge is recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt.

We do not use derivatives for trading or speculative purposes.  Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks but we have elected not to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded in other income (expense) as income within our consolidated statements of operations and were approximately none and $20,000 for the three and nine months ended September 30, 2018, respectively.

Foreign Currency Forward

Our objectives in using foreign currency derivatives are to add stability to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar and to manage our exposure to exchange rate movements. To accomplish this objective, we use foreign currency forwards as part of our exchange rate risk management strategy. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into the forward contract and holding it to maturity, we are locked into a future currency exchange rate in an amount equal to and for the term of the forward contract. For derivatives designated as net investment hedges, the changes in the fair value of the derivatives are reported in accumulated other comprehensive income. Amounts are reclassified out of accumulated other comprehensive income into earnings when the hedged net investment is either sold or substantially liquidated.  

The following table summarizes the terms of our derivative financial instruments as of September 30, 2018:

	Notional Amount			Strike			EffectiveDate or Date Assumed	MaturityDate
Interest Rate Swaps:
Oakland and Concord loan	$	19,604,712			3.95	%	May 18, 2016	April 10, 2023
Dufferin loan		13,607,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Mavis loan		11,469,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Brewster loan		7,496,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Interest Rate Cap:
LIBOR	$	90,000,000			1.25	%	July 1, 2017	December 22, 2018
Foreign Currency Forward:
Denominated in CAD	$	90,000,000	(1)		1.2846		March 28, 2018	January 28, 2019

⁽¹⁾ Notional amounts shown are denominated in CAD. These swaps were settled on October 11, 2018 in conjunction with the Canadian debt refinancing. See Note 12.  

On February 1, 2017, to hedge our net investment related to the Toronto Merger, we entered into a foreign currency forward contract with a notional amount of $58.5 million CAD, and a forward rate of approximately 1.3058. During the quarter ended March 31, 2017, we settled our two foreign currency forward contracts which resulted in us receiving a net settlement of approximately $1.4 million, and simultaneously entered into a third foreign currency forward contract with a notional amount of $101 million CAD, and a forward rate of approximately 1.3439. During the quarter ended September 30, 2017, we settled our third foreign currency forward contract, which resulted in us paying a net settlement of approximately $5.5 million, and simultaneously entered into a fourth foreign currency forward contract with a notional amount of $101 million CAD, and a forward rate of approximately 1.2526. The fourth foreign currency forward was settled on March 28, 2018 and resulted in us receiving a net settlement of approximately $2.2 million. We simultaneously entered into our fifth foreign currency forward as noted in the table above. A portion of our gain (loss) from our settled hedges is recorded net in foreign currency forward contract gain (loss) in our consolidated statements of comprehensive loss, and a gain of approximately none and $65,000 related to the ineffective portion is recorded in other income (expense) within our consolidated statements of operations for the three and nine months ended September 30, 2018, respectively.

The following table summarizes the terms of our derivative financial instruments as of December 31, 2017:

	Notional Amount			Strike			EffectiveDateor DateAssumed	MaturityDate
Interest Rate Swaps:
Oakland and Concord loan	$	19,960,190			3.95	%	May 18, 2016	April 10, 2023
Dufferin loan		14,025,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Mavis loan		11,821,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Brewster loan		7,726,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Interest Rate Cap:
LIBOR	$	90,000,000			1.25	%	July 1, 2017	December 22, 2018
Foreign Currency Forward:
Denominated in CAD	$	101,000,000	(1)		1.2526		August 31, 2017	March 29, 2018

⁽¹⁾ Notional amount shown is denominated in CAD.

The following table presents a gross presentation of the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets as of September 30, 2018 and December 31, 2017.

	Asset/Liability Derivatives
	Fair Value
Balance Sheet Location	September 30, 2018		December 31,  2017
Interest Rate Swaps
Other assets	$	920,928	$	455,526
Accounts payable and accrued liabilities		—		6,320
Interest Rate Cap
Other assets		214,853		472,501
Foreign Currency Forward
Accounts payable and accrued liabilities		—		67,092
Other assets		231,549		—

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 7. Related Party Transactions

Fees to Affiliates

Our Advisory Agreement with our Advisor, our dealer manager agreement, as amended ("Dealer Manager Agreement") with our Dealer Manager, our Property Management Agreement with our Property Manager and our Transfer Agent Agreement with our Transfer Agent entitle such affiliates to specified fees upon the provision of certain services with regard to the Offering and investment of funds in real estate properties, among other services, as well as certain reimbursements, as described below.

Advisory Agreement

We do not have any employees. Our Advisor is primarily responsible for managing our business affairs and carrying out the directives of our board of directors. Our Advisor receives various fees and expenses under the terms of our Advisory Agreement.

Our Advisor receives acquisition fees equal to 1.75% of the contract purchase price of each property we acquire plus reimbursement of any acquisition expenses incurred by our Advisor. Our Advisor also receives a monthly asset management fee equal to 0.05208%, which is one-twelfth of 0.625%, of our aggregate asset value, as defined in the Advisory Agreement.

Under our Advisory Agreement, our Advisor receives disposition fees in an amount equal to the lesser of (i) one-half of the competitive real estate commission or (ii) 1% of the contract sale price for each property we sell, as long as our Advisor provides substantial assistance in connection with the sale. The total real estate commissions paid (including the disposition fee paid to our Advisor) may not exceed the lesser of a competitive real estate commission or an amount equal to 6% of the contract sale price of the property.

Our Advisor is also entitled to various subordinated distributions pursuant to our Operating Partnership Agreement if we (1) list our shares of common stock on a national exchange, (2) terminate our Advisory Agreement (other than a voluntary termination), (3) liquidate our portfolio, or (4) enter into an Extraordinary Transaction, as defined in the Operating Partnership Agreement.

Our Advisory Agreement provides for reimbursement of our Advisor’s direct and indirect costs of providing administrative and management services to us. Pursuant to the Advisory Agreement, our Advisor is obligated to pay or reimburse us the amount by which our aggregate annual operating expenses, as defined, exceed the greater of 2% of our average invested assets or 25% of our net income, as defined, unless a majority of our independent directors determine that such excess expenses were justified based on unusual and non-recurring factors. For any fiscal quarter for which total operating expenses for the 12 months then ended exceed the limitation, we will disclose this fact in our next quarterly report or within 60 days of the end of that quarter and send a written disclosure of this fact to our stockholders. In each case the disclosure will include an explanation of the factors that the independent directors considered in arriving at the conclusion that the excess expenses were justified. Our aggregate annual operating expenses, as defined, did not exceed the thresholds described above.

Dealer Manager Agreement

In connection with our Primary Offering, our Dealer Manager received a sales commission of up to 7.0% of gross proceeds from sales of Class A Shares and up to 2.0% of gross proceeds from the sales of Class T Shares in the Primary Offering and a dealer manager fee up to 3.0% of gross proceeds from sales of both Class A Shares and Class T Shares in the Primary Offering under the terms of the Dealer Manager Agreement. In addition, our Dealer Manager receives an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering. We will cease paying the stockholder servicing fee with respect to the Class T Shares sold in the Primary Offering at the earlier of (i) the date we list our shares on a national securities exchange, merge or consolidate with or into another entity, or sell or dispose of all or substantially all of our assets, (ii) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of both Class A Shares and Class T Shares in our Primary Offering (i.e., excluding proceeds from sales pursuant to our distribution reinvestment plan), which calculation shall be made by us with the assistance of our Dealer Manager commencing after the termination of the Primary Offering; (iii) the fifth anniversary of the last day of the fiscal quarter in which our Primary Offering (i.e., excluding our distribution reinvestment plan offering) terminated; and (iv) the date that such Class T Share is redeemed or is no longer outstanding. Our Dealer Manager entered into participating dealer agreements with certain other broker-dealers which authorized them to sell our shares. Upon sale of our shares by such broker-dealers, our Dealer Manager re-allowed all of the sales commissions and, subject to certain limitations, the stockholder servicing fees paid in connection with sales made by these broker-dealers. Our Dealer Manager could also re-allow to these broker-dealers a portion of their dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by our Dealer Manager, payment of attendance fees required for employees of our Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. Our Dealer Manager also received reimbursement of bona fide due diligence expenses; however, to the extent these due diligence expenses could not be justified, any excess over actual due diligence expenses would have been considered underwriting compensation subject to a 10% FINRA limitation and, when aggregated with all other non-accountable expenses in connection with our Offering, could not exceed 3% of gross offering proceeds from sales in the Offering.

Affiliated Dealer Manager

Our Sponsor owns a 15% non-voting equity interest in our Dealer Manager. Affiliates of our Dealer Manager own a 2.5% non-voting membership interest in our Advisor.

Transfer Agent Agreement

Our Sponsor is the owner and manager of our Transfer Agent, which is a registered transfer agent with the SEC. Effective in June 2018, our Transfer Agent provides transfer agent and registrar services to our stockholders. These services include, among other things, processing payment of any sales commission and dealer manager fees associated with a particular purchase, as well as processing the distributions and any servicing fees with respect to our shares. Additionally, our Transfer Agent may retain and supervise third party vendors in its efforts to administer certain services. We believe that our Transfer Agent, through its knowledge and understanding of the direct participation program industry which includes non-traded REITs, is particularly suited to provide us with transfer agent and registrar services. Our Transfer Agent also conducts transfer agent and registrar services for other non-traded REITs sponsored by our Sponsor.

It is the duty of our board of directors to evaluate the performance of our Transfer Agent. In connection with the engagement of our Transfer Agent, we paid a one-time initial setup fee of $50,000. In addition, the other fees to be paid to our Transfer Agent are based on a fixed quarterly fee, one-time account setup fees and monthly open account fees. In addition, we will reimburse our Transfer Agent for all reasonable expenses or other changes incurred by it in connection with the provision of its services to us, and we will pay our Transfer Agent fees for any additional services we may request from time to time, in accordance with its rates then in effect. Upon the request of our Transfer Agent, we may also advance payment for substantial reasonable out-of-pocket expenditures to be incurred by it.

The initial term of the transfer agent agreement is three years, which term will be automatically renewed for one year successive terms, but either party may terminate the transfer agent agreement upon 90 days’ prior written notice. In the event that we terminate the transfer agent agreement, other than for cause, we will pay our transfer agent all amounts that would have otherwise accrued during the remaining term of the transfer agent agreement; provided, however, that when calculating the remaining months in the term for such purposes, such term is deemed to be a 12 month period starting from the date of the most recent annual anniversary date.

Property Management Agreement

Since inception, our Property Manager has served as the property manager for each of our properties pursuant to separate property management agreements. From October 1, 2015 through September 30, 2017, our Property Manager contracted with Extra Space for Extra Space to serve as the sub-property manager for each of our properties located in the United States pursuant to separate sub-property management agreements for each property. Effective October 1, 2017, our Property Manager terminated its sub-property management agreements with Extra Space. Our Property Manager now manages all of our properties directly. In connection with these terminations, each property management agreement that was subject to a sub-property management agreement with Extra Space was amended and, where applicable, we paid Extra Space a termination fee, as described below.

Prior Arrangement

Under the property management agreements in effect from October 1, 2015 through September 30, 2017 for our properties located in the United States, our Property Manager received a monthly management fee for each property equal to the greater of $2,500 or 6% of the gross revenues, plus reimbursement of our Property Manager’s costs of managing the properties. In addition, Extra Space agreed to pay up to $25,000 per property toward the signage and set-up costs associated with converting such property to the Extra Space brand (the “Set-Up Amount”). The property management agreements had a three year term and automatically renewed for successive one year periods thereafter, unless we or our Property Manager provided prior written notice at least 90 days prior to the expiration of the term. In general, if we terminated a property management agreement without cause during the initial three year term, we would have been required to pay our Property Manager a termination fee equal to the Set-Up Amount, reduced by 1/36th of the Set-Up Amount for every full month of the term that had elapsed. After the end of the initial three year term, we could have terminated a property management agreement on 30 days prior written notice without payment of a termination fee. Our Property Manager could have terminated a property management agreement on 60 days prior written notice to us.

The sub-property management agreements between our Property Manager and Extra Space were substantially the same as the foregoing property management agreements. Under the sub-property management agreements, our Property Manager paid Extra Space a monthly management fee for each property equal to the greater of $2,500 or 6% of the gross revenues, plus reimbursement of Extra Space’s costs of managing the properties; provided, however that no management fee was due and payable to Extra Space for the months of January and July each year during the term. Extra Space had the exclusive right to offer tenant insurance to the tenants and was entitled to all of the benefits of such tenant insurance. The sub-property management agreements also had a three year term and automatically renewed for successive one year periods thereafter, unless our Property Manager or Extra Space provided prior written notice at least 90 days prior to the expiration of the term. In general, if our Property Manager terminated a sub-property management agreement without cause during the initial three year term, it would have been required to pay Extra Space a termination fee equal to the Set-Up Amount, reduced by 1/36th of the Set-Up Amount for every full month of the term that had elapsed. After the end of the initial three year term, our Property Manager could have terminated a sub-property management agreement on 30 days prior written notice without payment of a termination fee. Extra Space could have terminated a sub-property management agreement on 60 days prior written notice to our Property Manager.

Termination of Sub-property Manager

As of October 1, 2017, our Property Manager terminated each sub-property management agreement with Extra Space, and we amended each of our corresponding property management agreements as described below. To the extent a termination fee would have been owed by any of our property-owning subsidiaries had its corresponding property management agreement with our Property Manager been terminated, each such property-owning subsidiary agreed to pay the termination fee owed by our Property Manager in accordance with its termination of the sub-property management agreements. The aggregate costs incurred in connection with the property management changes were approximately $0.8 million. This amount was included in property operating expenses – affiliates in the consolidated statements of operations for the year ended December 31, 2017.

Property Management Subsequent to September 30, 2017

In connection with the termination of each sub-property management agreement, each corresponding property management agreement was amended effective as of October 1, 2017. Pursuant to the amended property management agreements, our Property Manager receives: (i) a monthly management fee for each property equal to the greater of $3,000 or 6% of the gross revenues from the properties plus reimbursement of the Property Manager’s costs of managing the properties and (ii) a construction management fee equal to 5% of the cost of construction or capital improvement work in excess of $10,000. In addition, we have agreed with our Property Manager or an affiliate to share equally in the net revenue attributable to the sale of tenant insurance at our properties. The property management agreements have a three year term and automatically renew for successive three year periods thereafter, unless we or our Property Manager provide prior written notice at least 90 days prior to the expiration of the term. After the end of the initial three year term, either party may terminate a property management agreement generally upon 60 days prior written notice. With respect to each new property we acquire for which we enter into a property management agreement with our Property Manager we will also pay our Property Manager a one-time start-up fee in the amount of $3,750.

In connection with the change in our property management operations, each of our stores in the United States were rebranded under the “SmartStop® Self Storage” brand.

Our self storage properties located in Canada are subject to separate property management agreements with our Property Manager on terms substantially the same as the amended property management agreements described above.All properties owned or acquired in Canada are managed by a subsidiary of our Sponsor and branded using the SmartStop® Self Storage brand.

Pursuant to the terms of the agreements described above, the following table summarizes related party costs incurred and paid by us for the year ended December 31, 2017 and the nine months ended September 30, 2018, as well as any related amounts payable as of December 31, 2017 and September 30, 2018:

	Year Ended December 31, 2017						Nine Months Ended September 30,2018
	Incurred		Paid		Payable		Incurred		Paid		Payable
Expensed
Operating expenses (including    organizational costs)	$	1,090,366	$	751,010	$	345,864	$	1,678,975	$	1,558,164	$	466,675
Transfer Agent fees		—		—		—		197,182		189,607		7,575
Asset management fees		5,346,280		5,346,280		—		4,085,859		4,001,045		84,814
Property management fees(1)		5,285,082		5,285,082		—		3,601,324		3,510,257		91,067
Acquisition expenses		212,577		212,577		—		42,642		42,642		—
Capitalized
Acquisition costs		—		—		—		48,664		48,664		—
Additional Paid-in Capital
Selling commissions		966,516		966,516		—		—		—		—
Dealer Manager fee		353,167		513,881		—		—		—		—
Stockholder servicing fee(2)		299,299		690,272		2,620,040		—		507,910		2,112,130
Offering costs		33,466		33,466		—		—		—		—
Total	$	13,586,753	$	13,799,084	$	2,965,904	$	9,654,646	$	9,858,289	$	2,762,261

⁽¹⁾ During the nine months ended September 30, 2018 and year ended December 31, 2017, property management fees included $0 and approximately $3.2 million, respectively, of fees paid to the sub-property manager of our properties. This includes the costs incurred related to the change in property management of approximately $0.8 million during 2017.

⁽²⁾ We pay our Dealer Manager an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365^th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering.

Extra Space Self Storage

In connection with the Extra Space Merger of SmartStop Self Storage, Inc. into Extra Space, certain of our executive officers, including H. Michael Schwartz, Paula Mathews, Michael McClure and James Berg, received units of limited partnership interest in Extra Space Storage LP, the operating partnership for Extra Space, in exchange for units of limited partnership of SmartStop Self Storage Operating Partnership, L.P., the operating partnership for SmartStop, owned by such executives.

Tenant Insurance

We offer a tenant insurance plan to customers at our properties. In connection with the property management agreement amendments effective as of October 1, 2017, we agreed with our Property Manager or an affiliate to share equally in the net revenue attributable to the sale of tenant insurance at our properties. To facilitate such revenue sharing, we and an affiliate of our Property Manager agreed to transfer our respective rights in such tenant insurance revenue to a newly created joint venture in March of 2018, Strategic Storage TI Services II JV, LLC (the “TI Joint Venture”), a Delaware limited liability company owned 50% by our TRS subsidiary and 50% by our Property Manager’s affiliate SmartStop TI II, LLC (“SS TI II”).  Under the terms of the TI Joint Venture agreement, the TRS receives 50% of the net economics generated from such tenant insurance and SS TI II receives the other 50% of such net economics.  The TI Joint Venture further provides, among other things, that if a member or its affiliate terminates all or substantially all of the property management agreements or defaults in its material obligations under the agreement or undergoes a change of control, as defined, (the “Triggering Member”), the other member generally shall have the right (but not the obligation) to either (i) sell its 50% interest in the TI Joint Venture to the Triggering Member at fair market value (as agreed upon or as determined under an appraisal process) or (ii) purchase the Triggering Member’s 50% interest in the TI Joint Venture at 95% of fair market value. For the three and nine months ended September 30, 2018 we recorded revenues of approximately $0.4 million and $1.1 million, respectively, related to tenant insurance which was included in ancillary operating revenue in the consolidated statements of operations.

Storage Auction Program

Our Sponsor owns a minority interest in a company that owns 50% of an online auction company (the “Auction Company”) that serves as a web portal for self storage companies to post their auctions for the contents of abandoned storage units online instead of using live auctions conducted at the self storage facilities. The Auction Company receives a service fee for such services. Through December 31, 2017, neither our Property Manager nor our sub-property manager utilized the Auction Company at our properties. During the three and nine months ended September 30, 2018, we paid approximately $15,000 and $30,000, respectively, in fees to the Auction Company related to our properties. Our properties receive the proceeds from such online auctions.

Toronto Merger

On February 1, 2017, we entered into a definitive Agreement and Plan of Merger (the “Toronto Merger Agreement”) pursuant to which SST II Toronto Acquisition, LLC, a wholly owned and newly formed subsidiary of our Operating Partnership, merged (the “Toronto Merger”) with and into SS Toronto, a subsidiary of our Sponsor, with SS Toronto surviving the Toronto Merger and becoming a wholly owned subsidiary of our Operating Partnership. In connection with the Toronto Merger, we acquired five self storage properties located in the Greater Toronto Areas of North York, Mississauga, Brampton, Pickering and Scarborough (the “SS Toronto Properties”). Each property is operated under the “SmartStop” brand.

At the effective time of the Toronto Merger, each share of common stock, $0.001 par value per share, of SS Toronto issued and outstanding was automatically converted into the right to receive $11.0651 USD in cash and 0.7311 Class A Units of our Operating Partnership. We paid an aggregate of approximately $7.3 million USD in cash consideration and issued an aggregate of approximately 483,197 Class A Units of our Operating Partnership to the common stockholders of SS Toronto, consisting of Strategic 1031 and SS Toronto REIT Advisors, Inc., affiliates of our Sponsor. We acquired the SS Toronto Properties subject to approximately $50.1 million CAD (approximately $38.4 million USD) in outstanding debt (as described further below), approximately $0.8 million in other net liabilities, and paid approximately $33.1 million USD to an affiliate of Extra Space as repayment of outstanding debt and accrued interest owed by SS Toronto. No acquisition fee was paid to our Advisor for the Toronto Merger.

The terms of the Toronto Merger and the execution of the Toronto Merger Agreement were recommended by a special committee (the “Special Committee”) of our board of directors consisting of the Nominating and Corporate Governance Committee, the members of which were all of our independent directors. The Special Committee, with the assistance of its independent financial advisor and independent legal counsel, approved the transaction and determined that the Toronto Merger and the other transactions contemplated by the Toronto Merger Agreement were advisable and in the best interests of us, were fair and reasonable to us and were on terms and conditions not less favorable to us than those available from unaffiliated third parties.

In connection with the Toronto Merger, we entered into guarantees, dated as of February 1, 2017 (the “Guarantees”), under which we agreed to guarantee certain obligations of SS Toronto. The SS Toronto loans consist of (i) term loans totaling approximately $34.8 million CAD pursuant to promissory notes executed by SS Toronto in favor of Bank of Montreal on June 3, 2016, and (ii) mortgage financings in the aggregate amount of up to $17.7 million CAD pursuant to two promissory notes executed by subsidiaries of SS Toronto in favor of DUCA Financial Services Credit Union Ltd. on June 3, 2016.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 8. Commitments and Contingencies

Distribution Reinvestment Plan

We have adopted an amended and restated distribution reinvestment plan that allows both our Class A and Class T stockholders to have distributions otherwise distributable to them invested in additional shares of our Class A and Class T Shares, respectively. The purchase price per share pursuant to our distribution reinvestment plan is equivalent to the estimated value per share approved by our board of directors and in effect on the date of purchase of shares under the plan. In conjunction with the board of directors’ declaration of a new estimated value per share of our common stock on April 19, 2018, beginning in May 2018, shares sold pursuant to our distribution reinvestment plan are sold at the new estimated value per share of $10.65 per Class A Share and Class T Share. On November 30, 2016, we filed with the SEC a Registration Statement on Form S-3, which registered up to an additional $100.9 million in shares under our distribution reinvestment plan (our “DRP Offering”).  We may amend or terminate the amended and restated distribution reinvestment plan for any reason at any time upon 10 days’ prior written notice to stockholders. No sales commissions, dealer manager fee, or stockholder servicing fee will be paid on shares sold through the amended and restated distribution reinvestment plan. Through the termination of our Offering on January 9, 2017, we had sold approximately 1.1 million Class A shares and 0.1 million Class T Shares through our original distribution reinvestment plan. As of September 30, 2018, we had sold approximately 2.4 million Class A Shares and approximately 0.4 million Class T Shares through our DRP Offering.

Share Redemption Program

We adopted a share redemption program that enables stockholders to sell their shares to us in limited circumstances. As long as our common stock is not listed on a national securities exchange or over-the-counter market, our stockholders who have held their stock for at least one year may be able to have all or any portion of their shares of stock redeemed by us. We may redeem the shares of stock presented for redemption for cash to the extent that we have sufficient funds available to fund such redemption.

Our board of directors may amend, suspend or terminate the share redemption program with 30 days’ notice to our stockholders. We may provide this notice by including such information in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to our stockholders. The complete terms of our share redemption program are described in our prospectus.

The amount that we may pay to redeem stock for redemptions is the redemption price set forth in the following table which is based upon the number of years the stock is held:

Number Years Held	Redemption Price
Less than 1	No Redemption Allowed
1 or more but less than 3	90.0% of Redemption Amount
3 or more but less than 4	95.0% of Redemption Amount
4 or more	100.0% of Redemption Amount

At any time we are engaged in an offering of shares, the Redemption Amount for shares purchased under our share redemption program will always be equal to or lower than the applicable per share offering price. As long as we are engaged in an offering, the Redemption Amount shall be the lesser of the amount the stockholder paid for their shares or the price per share in the current offering. If we are no longer engaged in an offering, our board of directors will announce any redemption price adjustment and the time period of its effectiveness as a part of its regular communications with our stockholders. At any time the redemption price during an offering is determined by any method other than the offering price, if we have sold property and have made one or more special distributions to our stockholders of all or a portion of the net proceeds from such sales, the per share redemption price will be reduced by the net sale proceeds per share distributed to investors prior to the redemption date as a result of the sale of such property in the special distribution. Our board of directors will, in its sole discretion, determine which distributions, if any, constitute a special distribution. While our board of directors does not have specific criteria for determining a special distribution, we expect that a special distribution will only occur upon the sale of a property and the subsequent distribution of the net sale proceeds.

There are several limitations on our ability to redeem shares under the share redemption program including, but not limited to:

• Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” (as defined under the share redemption program) or bankruptcy, we may not redeem shares until the stockholder has held his or her shares for one year.

• During any calendar year, we will not redeem in excess of 5% of the weighted-average number of shares outstanding during the prior calendar year.

• The cash available for redemption is limited to the proceeds from the sale of shares pursuant to our distribution reinvestment plan, less any prior redemptions.

• We have no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

For the year ended December 31, 2017, we received redemption requests totaling approximately $2.2 million (approximately 0.2 million shares), approximately $1.5 million of which were fulfilled during the year ended December 31, 2017, with the remaining approximately $0.7 million included in accounts payable and accrued liabilities as of December 31, 2017 and fulfilled in January 2018.  For the nine months ended September 30, 2018, we received redemption requests totaling approximately $7.0 million (approximately 0.7 million shares), $2.3 million of which were fulfilled in April and July 2018, and $4.6 million of which were included in accounts payable and accrued liabilities as of September 30, 2018 and fulfilled in October 2018.

Operating Partnership Redemption Rights

The limited partners of our Operating Partnership have the right to cause our Operating Partnership to redeem their limited partnership units for cash equal to the value of an equivalent number of our shares, or, at our option, we may purchase their limited partnership units by issuing one share of our common stock for each limited partnership unit redeemed. These rights may not be exercised under certain circumstances that could cause us to lose our REIT election. Furthermore, limited partners may exercise their redemption rights only after their limited partnership units have been outstanding for one year. Our Advisor is prohibited from exchanging or otherwise transferring its limited partnership units so long as our Advisor is acting as our advisor under the Advisory Agreement.

Other Contingencies

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. We are not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.

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Declaration of Distributions

9 Months Ended

Sep. 30, 2018

Dividends [Abstract]

Declaration of Distributions

Note 9. Declaration of Distributions

On September 20, 2018, our board of directors declared a distribution rate for the fourth quarter of 2018 of approximately $0.001644 per day per share on the outstanding shares of common stock payable to both Class A and Class T stockholders of record of such shares as shown on our books at the close of business on each day during the period, commencing on October 1, 2018 and continuing on each day thereafter through and including December 31, 2018. In connection with this distribution, after the stockholder servicing fee is paid, approximately $0.0014 per day will be paid per Class T share. Such distributions payable to each stockholder of record during a month will be paid the following month.

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Selected Quarterly Data

9 Months Ended

Sep. 30, 2018

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Data

Note 10. Selected Quarterly Data

The following is a summary of quarterly financial information for the periods shown below:

	Three months ended
	September 30, 2017			December 31, 2017			March 31, 2018			June 30, 2018			September 30, 2018
Total revenues	$	19,939,512		$	19,385,071		$	19,866,457		$	20,045,516		$	20,313,069
Total operating expenses	$	19,197,777		$	16,991,318		$	16,010,116		$	16,605,713		$	15,836,436
Operating income	$	741,735		$	2,393,753		$	3,856,341		$	3,439,803		$	4,476,633
Net loss	$	(3,875,164	)	$	(2,351,155	)	$	(667,047	)	$	(1,437,330	)	$	(457,278	)
Net loss attributable to common stockholders	$	(3,840,775	)	$	(2,329,515	)	$	(661,203	)	$	(1,427,056	)	$	(451,424	)
Net loss per Class A Share-basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.01	)	$	(0.02	)	$	(0.01	)
Net loss per Class T Share-basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.01	)	$	(0.02	)	$	(0.01	)

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Potential Merger

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Potential Merger

Note 11. Potential Merger

On October 1, 2018, we, our Operating Partnership, Merger Sub, SSGT, and SSGT OP entered into the Merger Agreement in connection with the Mergers.

Subject to SSGT’s rights in connection with the go-shop provision described in further detail below, and pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the REIT Merger (the “REIT Merger Effective Time”), each share of SSGT common stock outstanding immediately prior to the REIT Merger Effective Time (other than shares owned by SSGT and its subsidiaries or us and our subsidiaries) will be automatically converted into the right to receive an amount in cash equal to $12.00, without interest and less any applicable withholding taxes (the “Merger Consideration”), which represents a total purchase price of approximately $340 million (which includes outstanding debt to be assumed or repaid as of September 30, 2018 but excludes transaction costs). Immediately prior to the REIT Merger Effective Time, all shares of SSGT common stock that are subject to vesting and other restrictions will become fully vested and non-forfeitable and, at the REIT Merger Effective Time, will be converted into the right to receive the Merger Consideration. At the effective time of the Partnership Merger, each outstanding unit of partnership interest in SSGT OP will be converted automatically into 1.127 units of partnership interest in our Operating Partnership. We are in the process of negotiating new loans in order to finance the Mergers, which would include the financing of the SSGT properties, the refinancing of certain of our existing properties and the payoff of certain of our existing loans.

Assuming all of the conditions to the Mergers are satisfied and the Mergers are consummated in accordance with the terms in the Merger Agreement, we will acquire all of the real estate owned by SSGT, consisting of 28 self storage facilities located in 10 states and in the Greater Toronto, Canada area, and comprising approximately 19,300 self storage units and approximately 2.1 million net rentable square feet of storage space.  Additionally, we will obtain the rights to acquire two self storage facilities currently under contract with SSGT.

The Merger Agreement contains customary representations, warranties and covenants. The closing of the REIT Merger is subject to the approval of the REIT Merger by the affirmative vote of the holders of a majority of all outstanding shares of SSGT’s common stock as of the record date for the special meeting of SSGT’s stockholders. The closing of the Mergers is also subject to various customary conditions. The closing of the REIT Merger is neither subject to a financing condition nor to the approval of our stockholders.

The Merger Agreement prohibits SSGT and its subsidiaries and representatives from soliciting, providing information or entering into discussions concerning proposals relating to alternative business combination transactions, subject to certain limited exceptions. However, under the terms of the Merger Agreement, during the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. New York City time on November 15, 2018 (the “Go Shop Period End Time”), SSGT (through the special committee of SSGT’s board of directors and its representatives) may initiate, solicit, provide information and enter into discussions concerning proposals relating to alternative business combination transactions. For up to five business days after the Go Shop Period End Time, SSGT may continue to participate in such discussions with a Go Shop Bidder (as defined in the Merger Agreement) and may, subject to certain conditions set forth in the Merger Agreement regarding the proposal made by such Go Shop Bidder, terminate the Merger Agreement and enter into an agreement with a Go Shop Bidder with respect to the proposal made by such Go Shop Bidder. The Merger Agreement also provides that, at any time beginning on the sixth business day after the Go Shop Period End Time and prior to receipt of the approval of SSGT’s stockholders, SSGT’s board of directors may, in certain circumstances, make an Adverse Recommendation Change (as such term is defined in the Merger Agreement) and terminate the Merger Agreement, subject to complying with certain conditions set forth in the Merger Agreement.

In connection with the termination of the Merger Agreement and SSGT’s entry into an alternative transaction with respect to a superior proposal, as well as under other specified circumstances, SSGT will be required to pay us a termination fee of $2.9 million in the event of termination on or prior to the fifth business day following the Go Shop Period End Time, or $9.6 million in the event of termination thereafter. In addition, the Merger Agreement provides for customary expense reimbursement under specified circumstances set forth in the Merger Agreement. The Merger Agreement also provides that we will be required to pay SSGT a reverse termination fee of $9.6 million under specified circumstances set forth in the Merger Agreement related to our failure to consummate the Closing.

We expect the SSGT stockholders meeting to occur in the first quarter of 2019 and, if the REIT Merger is approved by the SSGT stockholders, we expect the Mergers to close shortly thereafter.  However, there is no guarantee that the Mergers will be consummated.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Note 12. Subsequent Events

Distribution Reinvestment Plan Offering

As of November 12, 2018, we have issued approximately 2.5 million Class A shares of our common stock and approximately 0.4 million Class T Shares of our common stock for gross proceeds of approximately $25.5 million and approximately $3.9 million, pursuant to our DRP Offering.

Canadian Debt Refinancing

On October 11, 2018, we, through 10 special purpose entities owned by our Operating Partnership, entered into a loan agreement (the “Canadian Citibank Loan Agreement”) with Citibank, N.A. (“Citibank”), as lender. Under the terms of the Canadian Citibank Loan Agreement, we have a maximum borrowing capacity of $112 million CAD, of which we immediately borrowed $99.3 million CAD (the “Initial Proceeds”). The Initial Proceeds were primarily used to pay off all of the existing loans encumbering our properties located in the greater Toronto, Canada metropolitan area, all of which now serve as collateral under the Canadian Citibank Loan Agreement. We also have the right to receive future advances in the aggregate amount of up to $12.7 million CAD, subject to certain conditions as set forth in the loan agreement.

The Canadian Citibank Loan Agreement is a term loan that has a maturity date of October 9, 2020, which may, in certain circumstances, be extended at our option for three consecutive terms of one year each. Monthly payments are interest-only, with the full principal amount becoming due and payable on the maturity date. In general, the amounts outstanding bear interest at a rate equal to the sum of the “CDOR” (as defined in the Loan Agreement) and 2.25%. As of October 11, 2018, the interest rate was approximately 4.1%. In addition, pursuant to the requirements of the Canadian Citibank Loan Agreement, the Borrower purchased an interest rate cap with a notional amount of $99.3 million, with an effective date of October 11, 2018, whereby the CDOR is capped at 3.00% through October 15, 2021.

Extension of Amended KeyBank Credit Facility

On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date from December 22, 2018 to February 20, 2019 in order to facilitate financing for the potential merger with SSGT. Pursuant to this amendment, we also reduced the maximum borrowing capacity from $145 million to $110 million. We are in the process of negotiating new loans in order to finance the Mergers, which would include the financing of the SSGT properties, the refinancing of certain of our existing properties and the payoff of certain of our existing loans including the Amended KeyBank Credit Facility.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC.

Principles of Consolidation

Principles of Consolidation

Our financial statements, and the financial statements of our Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these entities not wholly-owned by us is presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated in consolidation.

Consolidation Considerations

Consolidation Considerations

Current accounting guidance provides a framework for identifying a variable interest entity (“VIE”) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and noncontrolling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. Our Operating Partnership is deemed to be a VIE and is consolidated by the Company as the primary beneficiary.

As of December 31, 2017, we had not entered into any other contracts/interests that would be deemed to be variable interests in VIEs other than our Operating Partnership.  As of September 30, 2018, we had not entered into any other contracts/interest that would be deemed to be variable interest in VIEs other than our tenant insurance joint venture and a real estate joint venture, both of which are accounted for under the equity method of accounting.  Please see Note 3 – Real Estate Facilities for further discussion regarding our joint venture with SmartCentres and Note 7 – Related Party Transactions for further discussions regarding our tenant insurance joint venture. Other than these joint ventures, we do not currently have any relationships with unconsolidated entities or financial partnerships.

Under the equity method, our investments in real estate joint ventures will be stated at cost and adjusted for our share of net earnings or losses and reduced by distributions. Equity in earnings of real estate joint ventures will generally be recognized based on our ownership interest in the earnings of each of the unconsolidated real estate joint ventures.

Noncontrolling Interest in Consolidated Entities

Noncontrolling Interest in Consolidated Entities

We account for the noncontrolling interest in our Operating Partnership in accordance with the related accounting guidance. Due to our control through our general partnership interest in our Operating Partnership and the limited rights of the limited partner, our Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company and the limited partner interest is reflected as a noncontrolling interest in the accompanying consolidated balance sheets. The noncontrolling interest shall be attributed its share of income and losses, even if that attribution results in a deficit noncontrolling interest balance.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Management will adjust such estimates when facts and circumstances dictate. Actual results could materially differ from those estimates. The most significant estimates made include the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed at relative fair value, the determination if certain entities should be consolidated, the evaluation of potential impairment of long-lived assets, and the estimated useful lives of real estate assets and intangibles.

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents.

We may maintain cash and cash equivalents in financial institutions in excess of insured limits, but believe this risk will be mitigated by only investing in or through major financial institutions.

Restricted Cash

Restricted Cash

Restricted cash consists primarily of impound reserve accounts for property taxes, insurance and capital improvements in connection with the requirements of certain of our loan agreements.

Real Estate Purchase Price Allocation

Real Estate Purchase Price Allocation

We account for acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values. This guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs as of the acquisition date.

The value of the tangible assets, consisting of land and buildings is determined as if vacant. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases are month-to-month contracts. We also consider whether in-place, market leases represent an intangible asset. We recorded $0 and approximately $4.4 million in intangible assets to recognize the value of in-place leases related to our acquisitions during the nine months ended September 30, 2018 and the year ended December 31, 2017, respectively. We do not expect, nor to date have we recorded, intangible assets for the value of customer relationships because we expect we will not have concentrations of significant customers and the average customer turnover will be fairly frequent.

Allocation of purchase price to acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available.

In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework provides guidance for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. We adopted this ASU on January 1, 2018. We expect that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. As a result, once an acquisition is deemed probable, transaction costs are capitalized rather than expensed. We have yet to acquire any properties that require capitalization of acquisition related transaction costs that would have previously been expensed under the guidance in effect prior to January 1, 2018.

During the three months ended September 30, 2018 and 2017, we expensed approximately $0.6 million and none, respectively, of acquisition-related transaction costs that did not meet our capitalization policy during the respective periods. During the nine months ended September 30, 2018 and 2017, we expensed approximately $0.9 million and $0.5 million, respectively, of acquisition-related transaction costs that did not meet our capitalization policy during the respective periods.

Evaluation of Possible Impairment of Long-Lived Assets

Evaluation of Possible Impairment of Long-Lived Assets

Management monitors events and changes in circumstances that could indicate that the carrying amounts of our long-lived assets may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of the assets may not be recoverable, we will assess the recoverability of the assets by determining whether the carrying value of the long-lived assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, we will adjust the value of the long-lived assets to the fair value and recognize an impairment loss. For the three and nine months ended September 30, 2018 and 2017, no impairment losses were recognized.

Revenue Recognition

Revenue Recognition

Management believes that all of our leases are operating leases. Rental income is recognized in accordance with the terms of the leases, which generally are month-to-month. Revenues from any long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents received over amounts contractually due pursuant to the underlying leases is included in accounts payable and accrued liabilities in our consolidated balance sheets and contractually due but unpaid rent is included in other assets.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

Tenant accounts receivable is reported net of an allowance for doubtful accounts. Management’s estimate of the allowance is based upon a review of the current status of tenant accounts receivable. It is reasonably possible that management’s estimate of the allowance will change in the future.

Real Estate Facilities

Real Estate Facilities

Real estate facilities are recorded based on relative fair value as of the date of acquisition. We capitalize costs incurred to develop, construct, renovate and improve properties, including interest and property taxes incurred during the construction period. The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress. The construction period ends when the asset is substantially complete and ready for its intended use.

Depreciation of Real Property Assets

Depreciation of Real Property Assets

Our management is required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives.

Depreciation of our real property assets is charged to expense on a straight-line basis over the estimated useful lives
as follows:

Description	Standard Depreciable Life
Land	Not Depreciated
Buildings	30-35 years
Site Improvements	7-10 years

Depreciation of Personal Property Assets

Depreciation of Personal Property Assets

Personal property assets consist primarily of furniture, fixtures and equipment and are depreciated on a straight-line basis over the estimated useful lives generally ranging from 3 to 5 years, and are included in other assets on our consolidated balance sheets.

Intangible Assets

Intangible Assets

We have allocated a portion of our real estate purchase price to in-place lease intangibles. We are amortizing in-place lease intangibles on a straight-line basis over the estimated future benefit period. As of September 30, 2018, the gross amounts allocated to in-place lease intangibles was approximately $34 million and accumulated amortization of in-place lease intangibles totaled approximately $32 million. As of December 31, 2017, the gross amounts allocated to in-place lease intangibles was approximately $34 million and accumulated amortization of in-place lease intangibles totaled approximately $30 million.

The total estimated future amortization expense of intangible assets for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter is approximately $25,000, $0.1 million, $0.1 million, $0.1 million, $0.1 million, and $1.2 million respectively.

Debt Issuance Costs

Debt Issuance Costs

The net carrying value of costs incurred in connection with our revolving credit facility are presented as debt issuance costs on our consolidated balance sheets. Debt issuance costs are amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. As of September 30, 2018 and December 31, 2017, accumulated amortization of debt issuance costs related to our revolving credit facility totaled approximately $2.1 million and $1.5 million, respectively.

The net carrying value of costs incurred in connection with obtaining non revolving debt are presented on the balance sheet as a deduction from debt (see Note 5). Debt issuance costs are amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. As of September 30, 2018 and December 31, 2017, accumulated amortization of debt issuance costs related to non-revolving debt totaled approximately $0.9 million and $0.6 million, respectively.

Offering Costs

Offering Costs

We pay our Dealer Manager an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering. We will cease paying the stockholder servicing fee with respect to the Class T Shares sold in the Primary Offering at the earlier of (i) the date we list our shares on a national securities exchange, merge or consolidate with or into another entity, or sell or dispose of all or substantially all of our assets, (ii) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of both Class A Shares and Class T Shares in our Primary Offering (i.e., excluding proceeds from sales pursuant to our distribution reinvestment plan), which calculation shall be made by us with the assistance of our Dealer Manager commencing after the termination of the Primary Offering; (iii)  the fifth anniversary of the last day of the fiscal quarter in which our Primary Offering (i.e., excluding our distribution reinvestment plan offering) terminated; and (iv) the date that such Class T Share is redeemed or is no longer outstanding. Our Dealer Manager entered into participating dealer agreements with certain other broker-dealers which authorized them to sell our shares. Upon sale of our shares by such broker-dealers, our Dealer Manager re-allowed all of the sales commissions and, subject to certain limitations, the stockholder servicing fees paid in connection with sales made by these broker-dealers. Our Dealer Manager was also permitted to re-allow to these broker-dealers a portion of their dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by our Dealer Manager, payment of attendance fees required for employees of our Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. Our Dealer Manager also received reimbursement of bona fide due diligence expenses; however, to the extent the due diligence expenses could not be justified, any excess over actual due diligence expenses would have been considered underwriting compensation subject to a 10% FINRA limitation and, when aggregated with all other non-accountable expenses in connection with our Public Offering, could not exceed 3% of gross offering proceeds from sales in the Public Offering. We recorded a liability within Due to affiliates for the future estimated stockholder servicing fees at the time of sale of Class T Shares as an offering cost.

Foreign Currency Translation

Foreign Currency Translation

For non-U.S. functional currency operations, assets and liabilities are translated to U.S. dollars at current exchange rates. Revenues and expenses are translated at the average rates for the period. All related adjustments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. Transactions denominated in a currency other than the functional currency of the related operation are recorded at rates of exchange in effect at the date of the transaction. Gains or losses on foreign currency transactions are recorded in other income (expense).

Redeemable Common Stock

Redeemable Common Stock

We adopted a share redemption program that enables stockholders to sell their shares to us in limited circumstances.

We record amounts that are redeemable under the share redemption program as redeemable common stock in the accompanying consolidated balance sheets since the shares are redeemable at the option of the holder and therefore their redemption is outside our control. The maximum amount redeemable under our share redemption program is limited to the number of shares we can repurchase with the amount of the net proceeds from the sale of shares under the distribution reinvestment plan. However, accounting guidance states that determinable amounts that can become redeemable should be presented as redeemable when such amount is known. Therefore, the net proceeds from the distribution reinvestment plan are considered to be temporary equity and are presented as redeemable common stock in the accompanying consolidated balance sheets.

In addition, current accounting guidance requires, among other things, that financial instruments that represent a mandatory obligation of us to repurchase shares be classified as liabilities and reported at settlement value. Our redeemable common shares are contingently redeemable at the option of the holder. When we determine we have a mandatory obligation to repurchase shares under the share redemption program, we reclassify such obligations from temporary equity to a liability based upon their respective settlement values.

For the year ended December 31, 2017, we received redemption requests totaling approximately $2.2 million (approximately 0.2 million shares), approximately $1.5 million of which were fulfilled during the year ended December 31, 2017, with the remaining approximately $0.7 million included in accounts payable and accrued liabilities as of December 31, 2017 and fulfilled in January 2018.  For the nine months ended September 30, 2018, we received redemption requests totaling approximately $7.0 million (approximately 0.7 million shares), approximately $2.3 million of which were fulfilled in April and July of 2018, and approximately $4.6 million of which were included in accounts payable and accrued liabilities as of September 30, 2018, and fulfilled in October of 2018.

Accounting for Equity Awards

Accounting for Equity Awards

The cost of restricted stock is required to be measured based on the grant date fair value and the cost recognized over the relevant service period.

Fair Value Measurements

Fair Value Measurements

Under GAAP, we are required to measure certain financial instruments at fair value on a recurring basis. In addition, we are required to measure other financial instruments and balances at fair value on a non-recurring basis. Fair value is defined by the accounting standard for fair value measurements and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value we use when measuring fair value:

• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;

• Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as interest rates and yield curves that are observable at commonly quoted intervals; and

• Level 3 inputs are unobservable inputs for the assets or liabilities that are typically based on an entity’s own assumptions as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level that is significant to the fair value measurement in its entirety.

The accounting guidance for fair value measurements and disclosures provides a framework for measuring fair value and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In determining fair value, we will utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment will be necessary to interpret Level 2 and 3 inputs in determining fair value of our financial and non-financial assets and liabilities. Accordingly, there can be no assurance that the fair values we will present will be indicative of amounts that may ultimately be realized upon sale or other disposition of these assets.

Financial and non-financial assets and liabilities measured at fair value on a non-recurring basis in our consolidated financial statements consist of real estate and related liabilities assumed related to our acquisitions. The fair values of these assets and liabilities were determined as of the acquisition dates using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity. In general, we consider multiple valuation techniques when measuring fair values. However, in certain circumstances, a single valuation technique may be appropriate. All of the fair values of the assets and liabilities as of the acquisition dates were derived using Level 3 inputs.

The carrying amounts of cash and cash equivalents, restricted cash, other assets, variable-rate debt, accounts payable and accrued liabilities, distributions payable and amounts due to affiliates approximate fair value.

The table below summarizes our fixed rate notes payable at September 30, 2018 and December 31, 2017. The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of the fixed rate notes payable was estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented below are not necessarily indicative of the amounts we would realize in a current market exchange.

	September 30, 2018				December 31, 2017
	Fair Value		Carrying Value		Fair Value		Carrying Value
Fixed Rate Secured Debt	$	205,700,000	$	217,430,858	$	213,300,000	$	218,332,483

As of September 30, 2018, we had interest rate swaps, an interest rate cap, and a net investment hedge (See Notes 5 and 6). The valuations of these instruments were determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative. The analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair value of the interest rate swaps were determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash payments.  Our fair values of our net investment hedges are based on the change in the spot rate at the end of the period as compared with the strike price at inception.

To comply with GAAP, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of derivative contracts for the effect of non-performance risk, we will consider the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we had determined that the majority of the inputs used to value our derivatives were within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, through September 30, 2018, we had assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

We record all derivatives on our balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. We may enter into derivative contracts that are intended to economically hedge certain of our risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.

For derivatives designated as net investment hedges, the effective portion of changes in the fair value of the derivatives are reported in accumulated other comprehensive income. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts are reclassified out of other comprehensive income into earnings when the hedged net investment is either sold or substantially liquidated.

Income Taxes

Income Taxes

We made an election to be taxed as a Real Estate Investment Trust (“REIT”), under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2014. To qualify as a REIT, we must continue to meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the REIT’s ordinary taxable income to stockholders (which is computed without regard to the dividends paid deduction or net capital gains and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the IRS grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for federal income tax purposes.

Even if we continue to qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income.

We filed an election to treat our TRS as a taxable REIT subsidiary effective January 1, 2014. In general, the TRS performs additional services for our customers and generally engages in any real estate or non-real estate related business. The TRS is subject to corporate federal and state income tax. The TRS follows accounting guidance which requires the use of the asset and liability method. Deferred income taxes represent the tax effect of future differences between the book and tax bases of assets and liabilities.

Per Share Data

Per Share Data

Basic earnings per share attributable to our common stockholders for all periods presented are computed by dividing net income (loss) attributable to our common stockholders by the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed by including the dilutive effect of unvested restricted stock, utilizing the treasury stock method. For all periods presented, the dilutive effect of unrestricted stock was not included in the diluted weighted average shares as such shares were antidilutive.

Recently Issued Accounting Guidance

Recently Issued Accounting Guidance

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” as ASC Topic 606. The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new standard, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. This ASU was applied using the modified retrospective approach. We have determined that our self storage rental revenues are not subject to the guidance in ASU 2014-09, as they qualify as lease contracts, which are excluded from its scope. We adopted this ASU on January 1, 2018 and its adoption did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 amends the guidance on accounting for leases. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02, lessor accounting is largely unchanged. It also includes extensive amendments to the disclosure requirements. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted for financial statements that have not yet been made available for issuance. ASU 2016-02 requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. While we continue to evaluate the standard, based upon our assessment to date, we do not anticipate the adoption of this standard will have a material impact on our consolidated financial statements, because substantially all of our lease revenues are derived from month-to-month leases.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 requires companies to include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and is applied retrospectively to all periods presented. We adopted this guidance on January 1, 2018 and have begun presenting restricted cash along with cash and cash equivalents in our consolidated statements of cash flows.  As a result of adopting the new guidance, approximately $1.7 million of restricted cash which was previously included as operating cash outflows, and approximately $0.7 million of restricted cash which was previously included as investing cash outflows within the consolidated statements of cash flows for the nine months ended September 30, 2017, have been removed and are now included in the cash, cash equivalents, and restricted cash line items at the beginning and end of the period.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Estimated Useful Lives used to Depreciate Real Property Assets

Depreciation of our real property assets is charged to expense on a straight-line basis over the estimated useful lives
as follows:

Description	Standard Depreciable Life
Land	Not Depreciated
Buildings	30-35 years
Site Improvements	7-10 years

Summary of Fixed Rate Notes Payable

The table below summarizes our fixed rate notes payable at September 30, 2018 and December 31, 2017. The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of the fixed rate notes payable was estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented below are not necessarily indicative of the amounts we would realize in a current market exchange.

	September 30, 2018				December 31, 2017
	Fair Value		Carrying Value		Fair Value		Carrying Value
Fixed Rate Secured Debt	$	205,700,000	$	217,430,858	$	213,300,000	$	218,332,483

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Real Estate Facilities (Tables)

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

Summary of Activity in Real Estate Facilities

The following summarizes the activity in real estate facilities during the nine months ended September 30, 2018:

Real estate facilities
Balance at December 31, 2017	$	829,679,477
Impact of foreign exchange rate changes		(4,135,139	)
Improvements and additions		1,159,083
Balance at September 30, 2018	$	826,703,421
Accumulated depreciation
Balance at December 31, 2017	$	(34,686,973	)
Depreciation expense		(15,060,835	)
Impact of foreign exchange rate changes		138,758
Balance at September 30, 2018	$	(49,609,050	)

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Pro Forma Financial Information (Unaudited) (Tables)

9 Months Ended

Sep. 30, 2018

Business Acquisition Pro Forma Information [Abstract]

Summary of Consolidated Results of Operations on Pro Forma Basis

The table set forth below summarizes, on a pro forma basis, the combined results of operations of the Company for the nine months ended September 30, 2018 and 2017. Such presentation reflects the Company’s acquisitions that occurred during 2017, which met the GAAP definition of a business in effect at that time, as if the acquisitions had occurred as of January 1, 2016. However, for acquisitions of lease-up properties that were not operational as of these dates, the pro forma information includes these acquisitions as of the date that formal operations began. There were no acquisitions completed during the nine months ended September 30, 2018. This pro forma information does not purport to represent what the actual consolidated results of operations of the Company would have been for the periods indicated, nor does it purport to predict the results of operations for future periods.

	For the nine months ended
	September 30, 2018			September 30,  2017
Pro forma revenue	$	60,225,042		$	57,188,309
Pro forma operating expenses		(46,127,260	)		(45,442,165	)
Pro forma net loss attributable to common stockholders		(234,620	)		(2,291,516	)

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Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Summarized Real Estate Secured Debt

The Company’s debt is summarized as follows:

Encumbered Property	September 30, 2018			December31, 2017			Interest Rate			Maturity Date
Raleigh/Myrtle Beach promissory note(1)	$	11,929,458		$	12,076,470			5.73	%	9/1/2023
Amended KeyBank Credit Facility(2)		89,182,500			86,382,500		4.76		%(11)	12/22/2018(13)
Milton fixed rate(3)		5,040,575			5,238,606			5.81	%	10/15/2018(12)
Burlington I fixed rate(3)		4,905,228			5,120,423			5.98	%	10/15/2018(12)
Burlington I variable rate(3)		2,336,370			2,402,418			5.97	%	10/15/2018(12)
Oakville I variable rate(3)		7,799,019			8,019,489			5.45	%	12/31/2018(12)
Burlington II and Oakville II variable rate(3)		12,286,742			12,834,819			4.34	%	2/28/2021(12)
Oakland and Concord loan(4)		19,604,712			19,960,190			3.95	%	4/10/2023
KeyBank CMBS Loan(5)		95,000,000			95,000,000			3.89	%	8/1/2026
KeyBank Florida CMBS Loan(6)		52,000,000			52,000,000			4.65	%	5/1/2027
$11M KeyBank Subordinate Loan(7)		11,000,000			11,000,000		6.01		%(11)	6/1/2020
Midland North Carolina CMBS Loan(8)		47,249,999			47,249,999			5.31	%	8/1/2024
Dufferin loan(9)		10,541,343			11,172,315			3.21	%	5/31/2019(12)
Mavis loan(9)		8,885,034			9,416,609			3.21	%	5/31/2019(12)
Brewster loan(9)		5,807,151			6,154,532			3.21	%	5/31/2019(12)
Granite variable rate loan(10)		6,906,378			7,101,614			6.45	%	12/1/2018(12)
Centennial variable rate loan(10)		6,202,444			6,377,780			6.70	%	12/1/2018(12)
Premium on secured debt, net		1,305,598			1,646,988
Debt issuance costs, net		(2,073,373	)		(2,361,850	)
Total debt	$	395,909,178		$	396,792,902

⁽¹⁾ Fixed rate debt with principal and interest payments due monthly. This promissory note is encumbered by five properties (Morrisville, Cary, Raleigh, Myrtle Beach I, and Myrtle Beach II).

⁽²⁾ As of September 30, 2018, this facility encumbers 21 properties (Xenia, Sidney, Troy, Greenville, Washington Court House, Richmond, Connersville, Vallejo, Port St. Lucie I, Sacramento, Sonoma, Las Vegas I, Las Vegas II, Las Vegas III, Baltimore, Aurora II, Plantation, Wellington, Naples, Port St. Lucie II, and Doral).

⁽³⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime, or the Canadian Dealer Offered Rate (“CDOR”).

⁽⁴⁾ This loan was assumed during the acquisition of the Oakland and Concord properties, along with an interest rate swap with USAmeriBank that fixes the interest rate at 3.95%.

⁽⁵⁾ This loan encumbers 29 properties (Whittier, La Verne, Santa Ana, Upland, La Habra, Monterey Park, Huntington Beach, Chico, Lancaster I, Riverside, Fairfield, Lompoc, Santa Rosa, Federal Heights, Aurora, Littleton, Bloomingdale, Crestwood, Forestville, Warren I, Sterling Heights, Troy, Warren II, Beverly, Everett, Foley, Tampa, Boynton Beach, and Lancaster II). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

⁽⁶⁾ This loan encumbers five properties (Pompano Beach, Lake Worth, Jupiter, Royal Palm Beach, and Delray). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

⁽⁷⁾ This variable rate loan encumbers 49% of the equity interest in the entities that own the 34 properties (the 29 properties encumbered by the KeyBank CMBS Loan and the five properties encumbered by the KeyBank Florida CMBS Loan), and is subordinate to the existing KeyBank CMBS Loan and KeyBank Florida CMBS Loan.

⁽⁸⁾ This loan encumbers 11 self storage properties (Asheville I, Arden, Asheville II, Hendersonville I, Asheville III, Asheville IV, Asheville V, Asheville VI, Asheville VII, Asheville VIII, and Hendersonville II) with monthly interest only payments until September 2019, at which time both interest and principal payments will be due monthly.

⁽⁹⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. These loans were assumed during the Toronto Merger, along with an interest rate swap with the Bank of Montreal that fixes the interest rate at 3.21%.

⁽¹⁰⁾ Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime.

⁽¹¹⁾ We have a $90 million interest rate cap on our variable rate LIBOR based debt that caps LIBOR at 1.25%. See Note 6.

⁽¹²⁾ Subsequent to September 30, 2018, these loans were paid off in full with the proceeds of a new, two year term loan with Citibank, N.A. See Note 12 for further discussion.

⁽¹³⁾ Subsequent to September 30, 2018, we amended and restated our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. See Note 12 for further discussion.

Future Principal Payment Requirements on Outstanding Debt

The following table presents the future principal payment requirements on outstanding debt as of September 30, 2018:

2018	$	122,872,859		(1)
2019		26,139,333		(1)
2020		12,622,834		(1)
2021		13,684,085		(1)
2022		3,635,428
2023 and thereafter		217,722,414
Total payments		396,676,953
Premium on secured debt, net		1,305,598
Debt issuance costs, net		(2,073,373	)
Total	$	395,909,178

⁽¹⁾ On October 11, 2018, we repaid approximately $70.7 million of our Canadian debt with the proceeds from a new loan with Citibank. On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. Subsequent to these debt transactions, future principal payment requirements on our outstanding debt for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter are approximately $0.2 million, $90.1 million, $83.1 million, $2.0 million, $3.6 million, and $217.7 million, respectively. See Note 12 – Subsequent Events.

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary of Derivative Financial Instruments

The following table summarizes the terms of our derivative financial instruments as of September 30, 2018:

	Notional Amount			Strike			EffectiveDate or Date Assumed	MaturityDate
Interest Rate Swaps:
Oakland and Concord loan	$	19,604,712			3.95	%	May 18, 2016	April 10, 2023
Dufferin loan		13,607,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Mavis loan		11,469,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Brewster loan		7,496,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Interest Rate Cap:
LIBOR	$	90,000,000			1.25	%	July 1, 2017	December 22, 2018
Foreign Currency Forward:
Denominated in CAD	$	90,000,000	(1)		1.2846		March 28, 2018	January 28, 2019

⁽¹⁾ Notional amounts shown are denominated in CAD. These swaps were settled on October 11, 2018 in conjunction with the Canadian debt refinancing. See Note 12.  

The following table summarizes the terms of our derivative financial instruments as of December 31, 2017:

	Notional Amount			Strike			EffectiveDateor DateAssumed	MaturityDate
Interest Rate Swaps:
Oakland and Concord loan	$	19,960,190			3.95	%	May 18, 2016	April 10, 2023
Dufferin loan		14,025,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Mavis loan		11,821,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Brewster loan		7,726,000	(1)		3.21	%	February 1, 2017	May 31, 2019
Interest Rate Cap:
LIBOR	$	90,000,000			1.25	%	July 1, 2017	December 22, 2018
Foreign Currency Forward:
Denominated in CAD	$	101,000,000	(1)		1.2526		August 31, 2017	March 29, 2018

⁽¹⁾ Notional amount shown is denominated in CAD.

Schedule of Fair Value of Derivative Financial Instruments and Classification In Consolidated Balance Sheets

The following table presents a gross presentation of the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets as of September 30, 2018 and December 31, 2017.

	Asset/Liability Derivatives
	Fair Value
Balance Sheet Location	September 30, 2018		December 31,  2017
Interest Rate Swaps
Other assets	$	920,928	$	455,526
Accounts payable and accrued liabilities		—		6,320
Interest Rate Cap
Other assets		214,853		472,501
Foreign Currency Forward
Accounts payable and accrued liabilities		—		67,092
Other assets		231,549		—

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Summary of Related Party Costs

Pursuant to the terms of the agreements described above, the following table summarizes related party costs incurred and paid by us for the year ended December 31, 2017 and the nine months ended September 30, 2018, as well as any related amounts payable as of December 31, 2017 and September 30, 2018:

	Year Ended December 31, 2017						Nine Months Ended September 30,2018
	Incurred		Paid		Payable		Incurred		Paid		Payable
Expensed
Operating expenses (including    organizational costs)	$	1,090,366	$	751,010	$	345,864	$	1,678,975	$	1,558,164	$	466,675
Transfer Agent fees		—		—		—		197,182		189,607		7,575
Asset management fees		5,346,280		5,346,280		—		4,085,859		4,001,045		84,814
Property management fees(1)		5,285,082		5,285,082		—		3,601,324		3,510,257		91,067
Acquisition expenses		212,577		212,577		—		42,642		42,642		—
Capitalized
Acquisition costs		—		—		—		48,664		48,664		—
Additional Paid-in Capital
Selling commissions		966,516		966,516		—		—		—		—
Dealer Manager fee		353,167		513,881		—		—		—		—
Stockholder servicing fee(2)		299,299		690,272		2,620,040		—		507,910		2,112,130
Offering costs		33,466		33,466		—		—		—		—
Total	$	13,586,753	$	13,799,084	$	2,965,904	$	9,654,646	$	9,858,289	$	2,762,261

⁽¹⁾ During the nine months ended September 30, 2018 and year ended December 31, 2017, property management fees included $0 and approximately $3.2 million, respectively, of fees paid to the sub-property manager of our properties. This includes the costs incurred related to the change in property management of approximately $0.8 million during 2017.

⁽²⁾ We pay our Dealer Manager an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365^th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Stock for Redemptions Based on Number of Years Stock Held

The amount that we may pay to redeem stock for redemptions is the redemption price set forth in the following table which is based upon the number of years the stock is held:

Number Years Held	Redemption Price
Less than 1	No Redemption Allowed
1 or more but less than 3	90.0% of Redemption Amount
3 or more but less than 4	95.0% of Redemption Amount
4 or more	100.0% of Redemption Amount

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Selected Quarterly Data (Tables)

9 Months Ended

Sep. 30, 2018

Quarterly Financial Information Disclosure [Abstract]

Summary of Quarterly Financial Information

The following is a summary of quarterly financial information for the periods shown below:

	Three months ended
	September 30, 2017			December 31, 2017			March 31, 2018			June 30, 2018			September 30, 2018
Total revenues	$	19,939,512		$	19,385,071		$	19,866,457		$	20,045,516		$	20,313,069
Total operating expenses	$	19,197,777		$	16,991,318		$	16,010,116		$	16,605,713		$	15,836,436
Operating income	$	741,735		$	2,393,753		$	3,856,341		$	3,439,803		$	4,476,633
Net loss	$	(3,875,164	)	$	(2,351,155	)	$	(667,047	)	$	(1,437,330	)	$	(457,278	)
Net loss attributable to common stockholders	$	(3,840,775	)	$	(2,329,515	)	$	(661,203	)	$	(1,427,056	)	$	(451,424	)
Net loss per Class A Share-basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.01	)	$	(0.02	)	$	(0.01	)
Net loss per Class T Share-basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.01	)	$	(0.02	)	$	(0.01	)

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Organization - Additional Information (Detail)							9 Months Ended
	Apr. 19, 2018 $ / shares	Feb. 01, 2017 shares	Jan. 09, 2017 USD ($) shares	Oct. 01, 2015 USD ($) $ / shares	May 23, 2014 USD ($)	Aug. 02, 2013 USD ($)	Sep. 30, 2018 USD ($) Employee StorageFacility State $ / shares shares	Jun. 30, 2018 $ / shares shares	May 31, 2018 $ / shares	Dec. 31, 2017 $ / shares shares	Nov. 30, 2016 shares
Organization And Nature Of Operations [Line Items]
Date of formation of company							Jan. 08, 2013
Preferred Stock, shares authorized | shares							200,000,000	200,000,000		200,000,000
Preferred Stock, par value | $ / shares							$ 0.001	$ 0.001		$ 0.001
Shares issuable pursuant to distribution reinvestment plan							$ 95,000,000
Number of self storage facilities | StorageFacility							83
Number of states located for self storage facilities | State							14
Investments in Majority-owned Subsidiaries
Organization And Nature Of Operations [Line Items]
Percentage of non-voting equity owned							15.00%
Investments in Majority-owned Subsidiaries | Affiliates
Organization And Nature Of Operations [Line Items]
Percentage owned by affiliates							2.50%
Distribution Reinvestment Plan
Organization And Nature Of Operations [Line Items]
Common Stock, shares authorized | shares											100,900,000
Description for termination of offering							The DRP Offering may be terminated at any time upon 10 days’ prior written notice to stockholders.
Primary Offering | Maximum
Organization And Nature Of Operations [Line Items]
Common stock, value authorized							$ 1,000,000,000
Primary Offering | Minimum [Member]
Organization And Nature Of Operations [Line Items]
Sale of common shares					$ 1,500,000
Class A Common stock
Organization And Nature Of Operations [Line Items]
Common Stock, shares authorized | shares							350,000,000			350,000,000
Common Stock, par value | $ / shares							$ 0.001			$ 0.001
Estimated value per common share | $ / shares	$ 10.65
Class A Common stock | Distribution Reinvestment Plan
Organization And Nature Of Operations [Line Items]
Selling price per share | $ / shares									$ 10.65
Class A Common stock | Common Stock | Distribution Reinvestment Plan
Organization And Nature Of Operations [Line Items]
Gross proceeds from issuance of common stock							$ 24,300,000
Number of common stock issued | shares							2,400,000
Class A Common stock | Primary Offering | Common Stock
Organization And Nature Of Operations [Line Items]
Number of shares issued in offering | shares			48,000,000
Gross proceeds from issuance of common stock			$ 493,000,000
Class T Common stock
Organization And Nature Of Operations [Line Items]
Common Stock, shares authorized | shares							350,000,000			350,000,000
Common Stock, par value | $ / shares							$ 0.001			$ 0.001
Estimated value per common share | $ / shares	$ 10.65
Class T Common stock | Distribution Reinvestment Plan
Organization And Nature Of Operations [Line Items]
Selling price per share | $ / shares									$ 10.65
Class T Common stock | Common Stock | Distribution Reinvestment Plan
Organization And Nature Of Operations [Line Items]
Gross proceeds from issuance of common stock							$ 3,700,000
Number of common stock issued | shares							400,000
Class T Common stock | Primary Offering | Common Stock
Organization And Nature Of Operations [Line Items]
Number of shares issued in offering | shares			7,000,000
Gross proceeds from issuance of common stock			$ 73,000,000
SS Toronto | Toronto Five Property Portfolio Merger | Class A Units of Operating Partnership
Organization And Nature Of Operations [Line Items]
Business acquisition partnership units issued | shares		483,197
SmartStop Asset Management | Strategic Storage Trust Advisor II, LLC
Organization And Nature Of Operations [Line Items]
Economic Interests							97.50%
Percentage of voting membership interest							100.00%
SmartStop Asset Management | Property Management Agreement
Organization And Nature Of Operations [Line Items]
Percentage of voting membership interest							100.00%
SmartStop Asset Management | Strategic Transfer Agent Services, LLC
Organization And Nature Of Operations [Line Items]
Percentage of membership interest							100.00%
SmartStop Self Storage, Inc.
Organization And Nature Of Operations [Line Items]
Sale price per share | $ / shares				$ 13.75
Enterprise value on sale				$ 1,400,000,000
Strategic Storage Advisor II, LLC
Organization And Nature Of Operations [Line Items]
Number of employees | Employee							0
Strategic Storage Operating Partnership II, L.P.
Organization And Nature Of Operations [Line Items]
Date of formation of company							Jan. 09, 2013
Advisor purchased a limited partnership interest in Operating Partnership						$ 200,000
Initial capital contribution						$ 1,000
Percentage of limited partnership interests							99.10%
Percentage of limited partnership interests owned by noncontrolling owners							0.90%

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) shares in Millions		1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 31, 2018	Jul. 31, 2018	Apr. 30, 2018	Jan. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Summary Of Significant Accounting Policies [Line Items]
Payments to acquire intangible assets							$ 0		$ 4,400,000
Business acquisition, transaction costs					$ 600,000	$ 0	900,000	$ 500,000
Impairment losses recognized					0	0	0	0
Gross amounts of lease intangibles					34,000,000		34,000,000		34,000,000
Accumulated amortization of lease intangibles					32,000,000		32,000,000		30,000,000
Total estimated future amortization expense of intangible assets, year 2018					25,000,000,000		25,000,000,000
Total estimated future amortization expense of intangible assets, year 2019					100,000		100,000
Total estimated future amortization expense of intangible assets, year 2020					100,000		100,000
Total estimated future amortization expense of intangible assets, year 2021					100,000		100,000
Total estimated future amortization expense of intangible assets, year 2022					100,000		100,000
Total estimated future amortization expense of intangible assets, thereafter					1,200,000		1,200,000
Accumulated amortization of debt issuance costs					2,100,000		$ 2,100,000		$ 1,500,000
Redemptions of common stock (in shares)							0.7		0.2
Redemptions of common stock, value				$ 700,000			$ 324		$ 2,200,000
Total value of shares requested to be redeemed							$ 7,000,000
Minimum percentage of ordinary taxable income to be distributed to stockholders							90.00%
ASU 2016-18 | Investing Cash Outflow
Summary Of Significant Accounting Policies [Line Items]
Restricted cash previously included as operating cash outflow and investing cash inflow						1,700,000		1,700,000
ASU 2016-18 | Operating Cash Inflow
Summary Of Significant Accounting Policies [Line Items]
Restricted cash previously included as operating cash outflow and investing cash inflow						$ 700,000		$ 700,000
Subsequent Event
Summary Of Significant Accounting Policies [Line Items]
Redemptions of common stock, value	$ 4,600,000
Dealer Manager
Summary Of Significant Accounting Policies [Line Items]
Underwriting commission							10.00%
Maximum dealer manager commission fee percentage of proceeds from Primary Offering							3.00%
Class T Common stock | Dealer Manager
Summary Of Significant Accounting Policies [Line Items]
Monthly stockholder servicing fee accrual description							accrues daily in an amount equal to 1/365th of 1% of the purchase price per share
Class T Common stock | Primary Offering Dealer Manager Agreement
Summary Of Significant Accounting Policies [Line Items]
Percentage of gross proceeds from sale of shares							10.00%
Class A Common stock | Primary Offering Dealer Manager Agreement
Summary Of Significant Accounting Policies [Line Items]
Percentage of gross proceeds from sale of shares							10.00%
Redeemable Common Stock
Summary Of Significant Accounting Policies [Line Items]
Redemptions of common stock, value		$ 2,300,000	$ 2,300,000				$ 6,978,799		1,500,000
Non Revolving Debt
Summary Of Significant Accounting Policies [Line Items]
Accumulated amortization of debt issuance costs					$ 900,000		$ 900,000		$ 600,000
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Estimated useful life							3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful life							5 years

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Estimated Useful Lives used to Depreciate Real Property Assets (Detail)	9 Months Ended
	Sep. 30, 2018
Land
Property Plant And Equipment [Line Items]
Standard Depreciable Life	Not Depreciated
Buildings | Minimum [Member]
Property Plant And Equipment [Line Items]
Standard Depreciable Life	30 years
Buildings | Maximum
Property Plant And Equipment [Line Items]
Standard Depreciable Life	35 years
Site Improvements | Minimum [Member]
Property Plant And Equipment [Line Items]
Standard Depreciable Life	7 years
Site Improvements | Maximum
Property Plant And Equipment [Line Items]
Standard Depreciable Life	10 years

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Summary of Fixed Rate Notes Payable (Detail) - Fixed Rate Secured Debt - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value	$ 205,700,000	$ 213,300,000
Carrying Value	$ 217,430,858	$ 218,332,483

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Schedule of Activity in Real Estate Facilities (Detail)	9 Months Ended
	Sep. 30, 2018 USD ($)
Real estate facilities
Real estate facilities, beginning balance	$ 829,679,477
Impact of foreign exchange rate changes	(4,135,139)
Improvements and additions	1,159,083
Real estate facilities, ending balance	826,703,421
Accumulated depreciation
Accumulated depreciation, beginning balance	(34,686,973)
Depreciation expense	(15,060,835)
Impact of foreign exchange rate changes	138,758
Accumulated depreciation, ending balance	$ (49,609,050)

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Real Estate Facilities - Additional Information (Detail) $ in Millions	Jun. 28, 2018 CAD ($)
SmartCentres
Restructuring Cost And Reserve [Line Items]
Percentage of units to be subscribed at closing in limited partnership	50.00%
Subscription price of units in limited partnership	$ 3.8
Subscription price as percentage of agreed upon fair market value of land to be contributed to the Limited Partnership	50.00%
East York Lot
Restructuring Cost And Reserve [Line Items]
Percentage of membership interest	50.00%
Fair market value	$ 7.6

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Summary of Consolidated Results of Operations on Pro Forma Basis (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition Pro Forma Information [Abstract]
Pro forma revenue	$ 60,225,042	$ 57,188,309
Pro forma operating expenses	(46,127,260)	(45,442,165)
Pro forma net loss attributable to common stockholders	$ (234,620)	$ (2,291,516)

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Pro Forma Financial Information - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition Pro Forma Information [Abstract]
Pro forma acquisition related expenses	$ 0.0	$ 0.5

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Schedule of Summarized Real Estate Secured Debt (Detail) - USD ($)		Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Debt Instrument Carrying Amount		$ 396,676,953
Debt issuance costs, net		(194,957)	$ (836,202)
Total		$ 395,909,178	396,792,902
Amended KeyBank Credit Facility
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[1],[2]	4.76%
Debt Instrument Carrying Amount	[1]	$ 89,182,500	86,382,500
Burlington I Variable Rate
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[3]	5.97%
Debt Instrument Carrying Amount	[3]	$ 2,336,370	2,402,418
Oakville I Variable Rate
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[3]	5.45%
Debt Instrument Carrying Amount	[3]	$ 7,799,019	8,019,489
Burlington II and Oakville II Variable Rate
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[3]	4.34%
Debt Instrument Carrying Amount	[3]	$ 12,286,742	12,834,819
$11M KeyBank Subordinate Loan
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[4]	$ 11,000,000	11,000,000
Debt Instrument, Interest Rate	[2],[4]	6.01%
Granite Variable Rate Loan
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[5]	6.45%
Debt Instrument Carrying Amount	[5]	$ 6,906,378	7,101,614
Centennial Variable Rate Loan
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[5]	6.70%
Debt Instrument Carrying Amount	[5]	$ 6,202,444	6,377,780
Fixed Rate Secured Debt
Debt Instrument [Line Items]
Premium on secured debt, net		1,305,598	1,646,988
Debt issuance costs, net		(2,073,373)	(2,361,850)
Total		395,909,178
Fixed Rate Secured Debt | Raleigh Myrtle Beach Promissory Note
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[6]	$ 11,929,458	12,076,470
Debt Instrument, Interest Rate	[6]	5.73%
Fixed Rate Secured Debt | Milton Fixed Rate
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[3]	5.81%
Debt Instrument Carrying Amount	[3]	$ 5,040,575	5,238,606
Fixed Rate Secured Debt | Burlington I Fixed Rate
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[3]	$ 4,905,228	5,120,423
Debt Instrument, Interest Rate	[3]	5.98%
Fixed Rate Secured Debt | Oakland and Concord Loan
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[7]	$ 19,604,712	19,960,190
Debt Instrument, Interest Rate	[7]	3.95%
Fixed Rate Secured Debt | KeyBank CMBS Loan
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[8]	$ 95,000,000	95,000,000
Debt Instrument, Interest Rate	[8]	3.89%
Fixed Rate Secured Debt | KeyBank Florida CMBS Loan
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[9]	$ 52,000,000	52,000,000
Debt Instrument, Interest Rate	[9]	4.65%
Fixed Rate Secured Debt | Midland North Carolina CMBS Loan
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[10]	$ 47,249,999	47,249,999
Debt Instrument, Interest Rate	[10]	5.31%
Fixed Rate Secured Debt | Dufferin Loan
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[11]	3.21%
Debt Instrument Carrying Amount	[11]	$ 10,541,343	11,172,315
Fixed Rate Secured Debt | Mavis Loan
Debt Instrument [Line Items]
Debt Instrument, Interest Rate	[11]	3.21%
Debt Instrument Carrying Amount	[11]	$ 8,885,034	9,416,609
Fixed Rate Secured Debt | Brewster Loan
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	[11]	$ 5,807,151	$ 6,154,532
Debt Instrument, Interest Rate	[11]	3.21%

[1] As of September 30, 2018, this facility encumbers 21 properties (Xenia, Sidney, Troy, Greenville, Washington Court House, Richmond, Connersville, Vallejo, Port St. Lucie I, Sacramento, Sonoma, Las Vegas I, Las Vegas II, Las Vegas III, Baltimore, Aurora II, Plantation, Wellington, Naples, Port St. Lucie II, and Doral).

[2] We have a $90 million interest rate cap on our variable rate LIBOR based debt that caps LIBOR at 1.25%. See Note 6.

[3] Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime, or the Canadian Dealer Offered Rate (“CDOR”).

[4] This variable rate loan encumbers 49% of the equity interest in the entities that own the 34 properties (the 29 properties encumbered by the KeyBank CMBS Loan and the five properties encumbered by the KeyBank Florida CMBS Loan), and is subordinate to the existing KeyBank CMBS Loan and KeyBank Florida CMBS Loan.

[5] Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime.

[6] Fixed rate debt with principal and interest payments due monthly. This promissory note is encumbered by five properties (Morrisville, Cary, Raleigh, Myrtle Beach I, and Myrtle Beach II).

[7] This loan was assumed during the acquisition of the Oakland and Concord properties, along with an interest rate swap with USAmeriBank that fixes the interest rate at 3.95%.

[8] This loan encumbers 29 properties (Whittier, La Verne, Santa Ana, Upland, La Habra, Monterey Park, Huntington Beach, Chico, Lancaster I, Riverside, Fairfield, Lompoc, Santa Rosa, Federal Heights, Aurora, Littleton, Bloomingdale, Crestwood, Forestville, Warren I, Sterling Heights, Troy, Warren II, Beverly, Everett, Foley, Tampa, Boynton Beach, and Lancaster II). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

[9] This loan encumbers five properties (Pompano Beach, Lake Worth, Jupiter, Royal Palm Beach, and Delray). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

[10] This loan encumbers 11 self storage properties (Asheville I, Arden, Asheville II, Hendersonville I, Asheville III, Asheville IV, Asheville V, Asheville VI, Asheville VII, Asheville VIII, and Hendersonville II) with monthly interest only payments until September 2019, at which time both interest and principal payments will be due monthly.

[11] Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. These loans were assumed during the Toronto Merger, along with an interest rate swap with the Bank of Montreal that fixes the interest rate at 3.21%.

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Schedule of Summarized Real Estate Secured Debt (Parenthetical) (Detail)				9 Months Ended
		Oct. 11, 2018	Oct. 01, 2018	Sep. 30, 2018 USD ($) Property	Sep. 30, 2018 CAD ($) Property		Dec. 31, 2017 USD ($)	Dec. 31, 2017 CAD ($)		Sep. 30, 2017 CAD ($)	Mar. 31, 2017 CAD ($)	Feb. 01, 2017 CAD ($)
Debt Instrument [Line Items]
Derivative, notional amount | $										$ 101,000,000	$ 101,000,000	$ 58,500,000
Citibank | Subsequent Event
Debt Instrument [Line Items]
Debt instrument maturity period		2 years
Interest Rate Cap | LIBOR
Debt Instrument [Line Items]
Derivative, notional amount | $				$ 90,000,000			$ 90,000,000
Interest Rate Swaps, Strike				1.25%	1.25%		1.25%	1.25%
Amended KeyBank Credit Facility
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[1],[2]			Dec. 22, 2018
Number of properties encumbered				21	21
Amended KeyBank Credit Facility | Subsequent Event
Debt Instrument [Line Items]
Debt Instrument Maturity Date			Feb. 20, 2019
Burlington I Variable Rate
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[3],[4]			Oct. 15, 2018
Oakville I Variable Rate
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[3],[4]			Dec. 31, 2018
Burlington II and Oakville II Variable Rate
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[3],[4]			Feb. 28, 2021
Oakland and Concord Loan | Interest Rate Swap
Debt Instrument [Line Items]
Derivative, notional amount | $				$ 19,604,712			$ 19,960,190
Interest Rate Swaps, Strike				3.95%	3.95%		3.95%	3.95%
KeyBank Florida CMBS Loan
Debt Instrument [Line Items]
Number of properties encumbered				5	5
$11M KeyBank Subordinate Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[5]			Jun. 01, 2020
Number of properties encumbered				34	34
Percentage of real estate property encumbered variable rate loan				49.00%
Dufferin Loan | Interest Rate Swap
Debt Instrument [Line Items]
Derivative, notional amount | $					$ 13,607,000	[6]		$ 14,025,000	[7]
Interest Rate Swaps, Strike				3.21%	3.21%		3.21%	3.21%
Mavis Loan | Interest Rate Swap
Debt Instrument [Line Items]
Derivative, notional amount | $					$ 11,469,000	[6]		$ 11,821,000	[7]
Interest Rate Swaps, Strike				3.21%	3.21%		3.21%	3.21%
Brewster Loan | Interest Rate Swap
Debt Instrument [Line Items]
Derivative, notional amount | $					$ 7,496,000	[6]		$ 7,726,000	[7]
Interest Rate Swaps, Strike				3.21%	3.21%		3.21%	3.21%
Granite Variable Rate Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[4],[8]			Dec. 01, 2018
Centennial Variable Rate Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[4],[8]			Dec. 01, 2018
Fixed Rate Secured Debt | Interest Rate Swap | SS Toronto
Debt Instrument [Line Items]
Fixed interest rate				3.21%	3.21%
Fixed Rate Secured Debt | Raleigh Myrtle Beach Promissory Note
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[9]			Sep. 01, 2023
Number of properties encumbered				5	5
Fixed Rate Secured Debt | Milton Fixed Rate
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[3],[4]			Oct. 15, 2018
Fixed Rate Secured Debt | Burlington I Fixed Rate
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[3],[4]			Oct. 15, 2018
Fixed Rate Secured Debt | Oakland and Concord Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[10]			Apr. 10, 2023
Fixed Rate Secured Debt | Oakland and Concord Loan | Interest Rate Swap
Debt Instrument [Line Items]
Fixed interest rate				3.95%	3.95%
Fixed Rate Secured Debt | KeyBank CMBS Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[11]			Aug. 01, 2026
Number of properties encumbered				29	29
Fixed Rate Secured Debt | KeyBank Florida CMBS Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[12]			May 01, 2027
Number of properties encumbered				5	5
Fixed Rate Secured Debt | Midland North Carolina CMBS Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[13]			Aug. 01, 2024
Number of properties encumbered				11	11
Fixed Rate Secured Debt | Dufferin Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[4],[14]			May 31, 2019
Fixed Rate Secured Debt | Mavis Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[4],[14]			May 31, 2019
Fixed Rate Secured Debt | Brewster Loan
Debt Instrument [Line Items]
Debt Instrument Maturity Date	[4],[14]			May 31, 2019

[1] As of September 30, 2018, this facility encumbers 21 properties (Xenia, Sidney, Troy, Greenville, Washington Court House, Richmond, Connersville, Vallejo, Port St. Lucie I, Sacramento, Sonoma, Las Vegas I, Las Vegas II, Las Vegas III, Baltimore, Aurora II, Plantation, Wellington, Naples, Port St. Lucie II, and Doral).

[2] Subsequent to September 30, 2018, we amended and restated our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. See Note 12 for further discussion

[3] Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime, or the Canadian Dealer Offered Rate (“CDOR”).

[4] Subsequent to September 30, 2018, these loans were paid off in full with the proceeds of a new, two year term loan with Citibank, N.A. See Note 12 for further discussion.

[5] This variable rate loan encumbers 49% of the equity interest in the entities that own the 34 properties (the 29 properties encumbered by the KeyBank CMBS Loan and the five properties encumbered by the KeyBank Florida CMBS Loan), and is subordinate to the existing KeyBank CMBS Loan and KeyBank Florida CMBS Loan.

[6] Notional amounts shown are denominated in CAD. These swaps were settled on October 11, 2018 in conjunction with the Canadian debt refinancing. See Note 12.

[7] Notional amount shown is denominated in CAD.

[8] Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. Variable rate loans are based on Canadian Prime.

[9] Fixed rate debt with principal and interest payments due monthly. This promissory note is encumbered by five properties (Morrisville, Cary, Raleigh, Myrtle Beach I, and Myrtle Beach II).

[10] This loan was assumed during the acquisition of the Oakland and Concord properties, along with an interest rate swap with USAmeriBank that fixes the interest rate at 3.95%.

[11] This loan encumbers 29 properties (Whittier, La Verne, Santa Ana, Upland, La Habra, Monterey Park, Huntington Beach, Chico, Lancaster I, Riverside, Fairfield, Lompoc, Santa Rosa, Federal Heights, Aurora, Littleton, Bloomingdale, Crestwood, Forestville, Warren I, Sterling Heights, Troy, Warren II, Beverly, Everett, Foley, Tampa, Boynton Beach, and Lancaster II). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

[12] This loan encumbers five properties (Pompano Beach, Lake Worth, Jupiter, Royal Palm Beach, and Delray). The separate assets of these encumbered properties are not available to pay our other debts. The equity interests in the entities that own these encumbered properties are pledged as collateral in the $11M KeyBank Subordinate Loan. See footnote 7, below.

[13] This loan encumbers 11 self storage properties (Asheville I, Arden, Asheville II, Hendersonville I, Asheville III, Asheville IV, Asheville V, Asheville VI, Asheville VII, Asheville VIII, and Hendersonville II) with monthly interest only payments until September 2019, at which time both interest and principal payments will be due monthly.

[14] Canadian Dollar denominated loans shown above in USD based on the foreign exchange rate in effect as of September 30, 2018. These loans were assumed during the Toronto Merger, along with an interest rate swap with the Bank of Montreal that fixes the interest rate at 3.21%.

XML

Debt - Additional Information (Detail)		9 Months Ended
	Oct. 29, 2018 USD ($)	Sep. 30, 2018 USD ($) Extension	Dec. 31, 2017 USD ($)	Sep. 30, 2017 CAD ($)	Mar. 31, 2017 CAD ($)	Feb. 01, 2017 CAD ($)	Feb. 18, 2016 USD ($)	Dec. 22, 2015 USD ($)
Debt Instrument [Line Items]
Weighted average interest rate on debt		4.62%
Guarantees provided in connection with loans		$ 42,000,000
Notional amount for interest rate cap				$ 101,000,000	$ 101,000,000	$ 58,500,000
Operating Partnership
Debt Instrument [Line Items]
Notional amount for interest rate cap			$ 90,000,000
LIBOR | Operating Partnership
Debt Instrument [Line Items]
Effective interest rate cap on derivative instrument			1.25%
Amended KeyBank Credit Facility
Debt Instrument [Line Items]
Maximum borrowings under credit facility		145,000,000					$ 145,000,000	$ 105,000,000
Potential maximum borrowings under credit facility								500,000,000
Increment in borrowing capacity								$ 10,000,000
Additional borrowing capacity							$ 40,000,000
Outstanding balance on credit facility		$ 89,200,000
Line of credit facility, initial term		3 years
Line of credit facility, maturity date		Dec. 22, 2018
Line of credit facility, term of extension options		1 year
Line of credit facility, number of extension options | Extension		2
Line of credit facility, description		The Amended KeyBank Credit Facility is a revolving loan with an initial term of three years, maturing on December 22, 2018, with two one-year extension options subject to certain conditions outlined further in the credit agreement for the Amended KeyBank Credit Facility (the “Amended Credit Agreement”). On October 29, 2018, we amended and restated our Amended KeyBank Credit Facility, extending the maturity date to February 20, 2019. See Note 12 - Subsequent Events. Payments due pursuant to the Amended KeyBank Credit Facility are interest-only for the first 36 months and a 30-year amortization schedule thereafter.
Line of credit facility amortization schedule		30 years
Line of credit facility interest-only period		36 months
Line of credit facility, interest rate description		The Eurodollar Loans bear interest at the lesser of (a) the Adjusted LIBO Rate (as defined in the Amended Credit Agreement) for the Interest Period in effect plus the Applicable Rate, or (b) the Maximum Rate (as defined in the Amended Credit Agreement). The Applicable Rate corresponds to our total leverage, as specified in the Amended Credit Agreement. For any ABR Loans, the Applicable Rate is 125 basis points if our total leverage is less than 50%, and 150 basis points if our leverage is greater than 50%. For any Eurodollar Loan, the Applicable Rate is 225 basis points if our total leverage is less than 50% and 250 basis points if our total leverage is greater than 50%.
Percent of collateral properties used for aggregate borrowing capacity		60.00%
Minimum debt service coverage ratio		1.35%
Total leverage ratio		60.00%
Percentage of net proceeds of equity received		80.00%
Minimum interest service coverage ratio		1.85%
Minimum fixed charge ratio		1.60%
Threshold percentage for ratio of variable rate indebtedness to total indebtedness.		30.00%
Percentage of required loan to value ratio		60.00%
Amended KeyBank Credit Facility | Subsequent Event
Debt Instrument [Line Items]
Maximum borrowings under credit facility	$ 110,000,000
Line of credit facility, maturity date	Feb. 20, 2019
Amended KeyBank Credit Facility | ABR Loan | Loans with Total Leverage Less Than 50%
Debt Instrument [Line Items]
Line of credit facility, applicable interest rate		1.25%
Amended KeyBank Credit Facility | ABR Loan | Loans with Total Leverage Greater Than 50%
Debt Instrument [Line Items]
Line of credit facility, applicable interest rate		1.50%
Amended KeyBank Credit Facility | Eurodollar Loan | Loans with Total Leverage Less Than 50%
Debt Instrument [Line Items]
Line of credit facility, applicable interest rate		2.25%
Amended KeyBank Credit Facility | Eurodollar Loan | Loans with Total Leverage Greater Than 50%
Debt Instrument [Line Items]
Line of credit facility, applicable interest rate		2.50%

XML

Future Principal Payment Requirements on Outstanding Debt (Detail) - USD ($)		Sep. 30, 2018	Dec. 31, 2017
Debt, Fiscal Year Maturity
2018	[1]	$ 122,872,859
2019	[1]	26,139,333
2020	[1]	12,622,834
2021	[1]	13,684,085
2022		3,635,428
2023 and thereafter		217,722,414
Total payments		396,676,953
Debt issuance costs, net		(194,957)	$ (836,202)
Total		395,909,178	396,792,902
Fixed Rate Secured Debt
Debt, Fiscal Year Maturity
Premium on secured debt, net		1,305,598	1,646,988
Debt issuance costs, net		(2,073,373)	$ (2,361,850)
Total		$ 395,909,178

[1] On October 11, 2018, we repaid approximately $70.7 million of our Canadian debt with the proceeds from a new loan with Citibank. On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. Subsequent to these debt transactions, future principal payment requirements on our outstanding debt for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter are approximately $0.2 million, $90.1 million, $83.1 million, $2.0 million, $3.6 million, and $217.7 million, respectively.

XML

Future Principal Payment Requirements on Outstanding Debt (Parenthetical) (Detail) - USD ($)				9 Months Ended
		Oct. 29, 2018	Oct. 11, 2018	Sep. 30, 2018
Debt Instrument [Line Items]
2018	[1]			$ 122,872,859
2019	[1]			26,139,333
2020	[1]			12,622,834
2021	[1]			13,684,085
2022				3,635,428
2023 and thereafter				$ 217,722,414
Amended KeyBank Credit Facility
Debt Instrument [Line Items]
Line of credit facility expiration date				Dec. 22, 2018
Subsequent Event
Debt Instrument [Line Items]
2018			$ 200,000
2019			90,100,000
2020			83,100,000
2021			2,000,000
2022			3,600,000
2023 and thereafter			217,700,000
Subsequent Event | Amended KeyBank Credit Facility
Debt Instrument [Line Items]
Line of credit facility expiration date		Feb. 20, 2019
Subsequent Event | Citibank
Debt Instrument [Line Items]
Repayments of Long-term Lines of Credit			$ 70,700,000

[1] On October 11, 2018, we repaid approximately $70.7 million of our Canadian debt with the proceeds from a new loan with Citibank. On October 29, 2018, we amended our Amended KeyBank Credit Facility to extend the maturity date until February 20, 2019. Subsequent to these debt transactions, future principal payment requirements on our outstanding debt for the years ending December 31, 2018, 2019, 2020, 2021, 2022, and thereafter are approximately $0.2 million, $90.1 million, $83.1 million, $2.0 million, $3.6 million, and $217.7 million, respectively.

XML

Derivative Instruments - Additional Information (Detail)		3 Months Ended			9 Months Ended
	Mar. 28, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 CAD ($) Contract $ / $	Mar. 31, 2017 CAD ($) Contract $ / $	Feb. 01, 2017 CAD ($) Contract $ / $
Derivative Instruments And Hedging Activities Disclosures [Line Items]
Derivative, notional amount						$ 101,000,000	$ 101,000,000	$ 58,500,000
Forward rate of derivative (CAD/USD) | $ / $						1.2526	1.3439	1.3058
Number of foreign currency forward contracts settled | Contract						4	2
Number of foreign currency forward contracts entered | Contract						1	1	1
Foreign currency forward contract gain	$ 2,200,000		$ 5,500,000	$ 1,400,000	$ 2,431,232
Other income (expense)
Derivative Instruments And Hedging Activities Disclosures [Line Items]
Change in fair value of derivatives not designated in hedging relationships		$ 0			20,000
Gain on foreign currency forward contract, ineffective portion		$ 0			$ 65,000

XML

Derivative Instruments - Summary of Derivative Financial Instruments (Detail)	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($) $ / Unit	Dec. 31, 2017 USD ($) $ / Unit	Sep. 30, 2018 CAD ($) $ / Unit		Dec. 31, 2017 CAD ($) $ / Unit		Sep. 30, 2017 CAD ($)	Mar. 31, 2017 CAD ($)	Feb. 01, 2017 CAD ($)
Derivative [Line Items]
Derivative, notional amount							$ 101,000,000	$ 101,000,000	$ 58,500,000
Interest Rate Swap | Oakland and Concord Loan
Derivative [Line Items]
Derivative, notional amount	$ 19,604,712	$ 19,960,190
Interest Rate Swaps, Strike	3.95%	3.95%	3.95%		3.95%
Interest Rate Swaps, Effective Date or Date Assumed	May 18, 2016	May 18, 2016
Interest Rate Swaps, Maturity Date	Apr. 10, 2023	Apr. 10, 2023
Interest Rate Swap | Dufferin Loan
Derivative [Line Items]
Derivative, notional amount			$ 13,607,000	[1]	$ 14,025,000	[2]
Interest Rate Swaps, Strike	3.21%	3.21%	3.21%		3.21%
Interest Rate Swaps, Effective Date or Date Assumed	Feb. 01, 2017	Feb. 01, 2017
Interest Rate Swaps, Maturity Date	May 31, 2019	May 31, 2019
Interest Rate Swap | Mavis Loan
Derivative [Line Items]
Derivative, notional amount			$ 11,469,000	[1]	$ 11,821,000	[2]
Interest Rate Swaps, Strike	3.21%	3.21%	3.21%		3.21%
Interest Rate Swaps, Effective Date or Date Assumed	Feb. 01, 2017	Feb. 01, 2017
Interest Rate Swaps, Maturity Date	May 31, 2019	May 31, 2019
Interest Rate Swap | Brewster Loan
Derivative [Line Items]
Derivative, notional amount			$ 7,496,000	[1]	$ 7,726,000	[2]
Interest Rate Swaps, Strike	3.21%	3.21%	3.21%		3.21%
Interest Rate Swaps, Effective Date or Date Assumed	Feb. 01, 2017	Feb. 01, 2017
Interest Rate Swaps, Maturity Date	May 31, 2019	May 31, 2019
Interest Rate Cap | LIBOR
Derivative [Line Items]
Derivative, notional amount	$ 90,000,000	$ 90,000,000
Interest Rate Swaps, Strike	1.25%	1.25%	1.25%		1.25%
Interest Rate Swaps, Effective Date or Date Assumed	Jul. 01, 2017	Jul. 01, 2017
Interest Rate Swaps, Maturity Date	Dec. 22, 2018	Dec. 22, 2018
Foreign Currency Forward
Derivative [Line Items]
Foreign Currency Forward, Notional Amount			$ 90,000,000	[1]	$ 101,000,000	[2]
Foreign Currency Forward, Strike | $ / Unit	1.2846	1.2526	1.2846		1.2526
Foreign Currency Forward, Effective Date or Date Assumed	Mar. 28, 2018	Aug. 31, 2017
Foreign Currency Forward, Maturity Date	Jan. 28, 2019	Mar. 29, 2018

[1] Notional amounts shown are denominated in CAD. These swaps were settled on October 11, 2018 in conjunction with the Canadian debt refinancing. See Note 12.

[2] Notional amount shown is denominated in CAD.

XML

Derivative Instruments - Schedule of Fair Value of Derivative Financial Instruments and Classification In Consolidated Balance Sheets (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Interest Rate Swaps | Other assets
Derivatives Fair Value [Line Items]
Derivative fair value, assets	$ 920,928	$ 455,526
Interest Rate Swaps | Accounts payable and accrued liabilities
Derivatives Fair Value [Line Items]
Derivative fair value, liability		6,320
Interest Rate Caps | Other assets
Derivatives Fair Value [Line Items]
Derivative fair value, assets	214,853	472,501
Foreign Currency Forward | Other assets
Derivatives Fair Value [Line Items]
Derivative fair value, assets	$ 231,549
Foreign Currency Forward | Accounts payable and accrued liabilities
Derivatives Fair Value [Line Items]
Derivative fair value, liability		$ 67,092

XML

Related Party Transactions - Additional Information (Detail) $ / shares in Units, $ in Millions				3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 01, 2017 USD ($)	Feb. 01, 2017 USD ($) $ / shares shares	Oct. 01, 2015 USD ($)	Sep. 30, 2018 USD ($) $ / shares	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) StorageFacility $ / shares	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) $ / shares	Feb. 01, 2017 CAD ($)
Related Party Transaction [Line Items]
Property operating expenses – affiliates				$ 2,571,670	$ 3,307,619	$ 7,687,183	$ 8,145,469
Self storage rental revenue				19,796,139	$ 19,804,298	$ 58,784,034	$ 56,356,871
Number of self storage facilities | StorageFacility						83
Loans outstanding				396,676,953		$ 396,676,953
Toronto Merger
Related Party Transaction [Line Items]
Number of self storage facilities		5
Auction Company | Shareholder Service
Related Party Transaction [Line Items]
Self storage rental revenue				$ 15,000		$ 30,000
Strategic Storage TI Services II JV, LLC | Tenant Insurance
Related Party Transaction [Line Items]
Threshold percentage to purchase triggering member ownership interest in joint venture at fair market value				95.00%		95.00%
Operating revenue				$ 400,000		$ 1,100,000
Strategic Storage TI Services II JV, LLC | Tenant Insurance | Member or its affiliate terminates all or substantially all of the property management agreements or defaults in its material obligations
Related Party Transaction [Line Items]
Percentage of ownership interest in joint venture to sell to triggering member at fair market value				50.00%		50.00%
Percentage of ownership interest in joint venture to purchase from triggering member at 95 percent of fair market value				50.00%		50.00%
Strategic Storage TI Services II JV, LLC | Tenant Insurance | TRS subsidiary
Related Party Transaction [Line Items]
Percentage of ownership interest in joint venture				50.00%		50.00%
Percentage of net economics generated from tenant insurance to be received under terms of joint venture agreement						50.00%
Class A Common stock
Related Party Transaction [Line Items]
Common Stock, par value | $ / shares				$ 0.001		$ 0.001		$ 0.001
Class T Common stock
Related Party Transaction [Line Items]
Common Stock, par value | $ / shares				$ 0.001		$ 0.001		$ 0.001
Advisory Agreement
Related Party Transaction [Line Items]
Rate of acquisition fees of purchase price of contract				1.75%		1.75%
Monthly asset management fee						0.05208%
Monthly asset management fee one twelfth of less than one percentage of average invested assets						one-twelfth of 0.625%
Disposition fees percentage of sale price of property						1.00%
Operating expenses reimbursement percentage of average investment in assets						2.00%
Operating expenses reimbursement percentage of net income						25.00%
Operating expenses exceed limitation						12 months
Maximum days for disclosure fact						60 days
Percentage owned by affiliate						2.50%
Advisory Agreement | Maximum
Related Party Transaction [Line Items]
Commission percentage of sale price of property						6.00%
Dealer Manager
Related Party Transaction [Line Items]
Maximum dealer manager commission fee percentage of proceeds from Primary Offering						3.00%
Underwriting commission						10.00%
Dealer Manager | Class A Common stock
Related Party Transaction [Line Items]
Sale commission fees percentage of proceed from Primary Offering						7.00%
Dealer Manager | Class T Common stock
Related Party Transaction [Line Items]
Sale commission fees percentage of proceed from Primary Offering						2.00%
Monthly stockholder servicing fee accrual description						accrues daily in an amount equal to 1/365th of 1% of the purchase price per share
Primary Offering Dealer Manager Agreement | Class A Common stock
Related Party Transaction [Line Items]
Percentage of gross proceeds from sale of shares						10.00%
Primary Offering Dealer Manager Agreement | Class T Common stock
Related Party Transaction [Line Items]
Percentage of gross proceeds from sale of shares						10.00%
SmartStop Asset Management
Related Party Transaction [Line Items]
Percentage of non-voting equity owned						15.00%
SmartStop Asset Management | Auction Company
Related Party Transaction [Line Items]
Percentage of limited partnership interests				50.00%		50.00%
Transfer Agent Agreement
Related Party Transaction [Line Items]
Initial setup fees paid to agent						$ 50,000
Transfer agent agreement term						3 years
Transfer agent renewal agreement term						1 year
Transfer agent agreement termination description						The initial term of the transfer agent agreement is three years, which term will be automatically renewed for one year successive terms, but either party may terminate the transfer agent agreement upon 90 days’ prior written notice. In the event that we terminate the transfer agent agreement, other than for cause, we will pay our transfer agent all amounts that would have otherwise accrued during the remaining term of the transfer agent agreement; provided, however, that when calculating the remaining months in the term for such purposes, such term is deemed to be a 12 month period starting from the date of the most recent annual anniversary date.
Property Management Agreement
Related Party Transaction [Line Items]
Agreement termination date	Oct. 01, 2017
Property management agreement termination description						The property management agreements had a three year term and automatically renewed for successive one year periods thereafter, unless we or our Property Manager provided prior written notice at least 90 days prior to the expiration of the term. In general, if we terminated a property management agreement without cause during the initial three year term, we would have been required to pay our Property Manager a termination fee equal to the Set-Up Amount, reduced by 1/36th of the Set-Up Amount for every full month of the term that had elapsed. After the end of the initial three year term, we could have terminated a property management agreement on 30 days prior written notice without payment of a termination fee. Our Property Manager could have terminated a property management agreement on 60 days prior written notice to us.
Agreement date			Oct. 01, 2015
Property Management Agreement | Maximum
Related Party Transaction [Line Items]
Signage and set-up costs associated with converting each property to extra space brand			$ 25,000
Property Management Agreement | Minimum [Member]
Related Party Transaction [Line Items]
Property management monthly management fee			$ 2,500
Property management monthly management fee percentage on gross revenue			6.00%
Strategic Storage Trust Sub Property Management Limited Liability Company
Related Party Transaction [Line Items]
Property management agreement termination description						The sub-property management agreements also had a three year term and automatically renewed for successive one year periods thereafter, unless our Property Manager or Extra Space provided prior written notice at least 90 days prior to the expiration of the term. In general, if our Property Manager terminated a sub-property management agreement without cause during the initial three year term, it would have been required to pay Extra Space a termination fee equal to the Set-Up Amount, reduced by 1/36th of the Set-Up Amount for every full month of the term that had elapsed. After the end of the initial three year term, our Property Manager could have terminated a sub-property management agreement on 30 days prior written notice without payment of a termination fee. Extra Space could have terminated a sub-property management agreement on 60 days prior written notice to our Property Manager
Sub property management agreement description						Under the sub-property management agreements, our Property Manager paid Extra Space a monthly management fee for each property equal to the greater of $2,500 or 6% of the gross revenues, plus reimbursement of Extra Space’s costs of managing the properties; provided, however that no management fee was due and payable to Extra Space for the months of January and July each year during the term.
Strategic Storage Trust Sub Property Management Limited Liability Company | Minimum [Member]
Related Party Transaction [Line Items]
Property management monthly management fee			$ 2,500
Property management monthly management fee percentage on gross revenue			6.00%
Termination of Sub-property Manager | Property Operating Expenses - Affiliates
Related Party Transaction [Line Items]
Agreement termination date	Oct. 01, 2017
Property operating expenses – affiliates								$ 800,000
Property Management Agreement
Related Party Transaction [Line Items]
Property management agreement termination description						The property management agreements have a three year term and automatically renew for successive three year periods thereafter, unless we or our Property Manager provide prior written notice at least 90 days prior to the expiration of the term. After the end of the initial three year term, either party may terminate a property management agreement generally upon 60 days prior written notice.
Agreement amendment effective date	Oct. 01, 2017
Percentage of fee of property manager	6.00%
Construction management fee	5.00%
Cost of construction or capital improvement work	$ 10,000
One time fee for property manager	3,750
Property Management Agreement | Minimum [Member]
Related Party Transaction [Line Items]
Property management monthly management fee	$ 3,000
SmartStop TI II, LLC | Strategic Storage TI Services II JV, LLC | Tenant Insurance
Related Party Transaction [Line Items]
Percentage of ownership interest in joint venture				50.00%		50.00%
Percentage of net economics generated from tenant insurance to be received under terms of joint venture agreement						50.00%
SS Toronto | Toronto Merger
Related Party Transaction [Line Items]
Common Stock, par value | $ / shares		$ 0.001
Consideration per share of common stock | $ / shares		$ 11.0651
Business acquisition cash consideration transferred		$ 7,300,000
Loans outstanding		38,400,000							$ 50.1
Acquisition fees incurred to the advisor		0
Acquisition assumed other net liabilities		$ 800,000
SS Toronto | Toronto Merger | Term Loan
Related Party Transaction [Line Items]
Guarantee obligations									34.8
SS Toronto | Toronto Merger | Promissory Notes
Related Party Transaction [Line Items]
Guarantee obligations									$ 17.7
SS Toronto | Toronto Merger | Class A Units of Operating Partnership
Related Party Transaction [Line Items]
Operating partnership units issued per share of common stock		73.11%
Business acquisition partnership units issued | shares		483,197

XML

Summary of Related Party Costs (Detail) - USD ($)		9 Months Ended	12 Months Ended
		Sep. 30, 2018	Dec. 31, 2017
Related Party Transaction [Line Items]
Related party costs, Incurred		$ 9,654,646	$ 13,586,753
Related party costs, Paid		9,858,289	13,799,084
Related party costs, Payable		2,762,261	2,965,904
Operating expenses (including organizational costs)
Related Party Transaction [Line Items]
Related party costs, Incurred		1,678,975	1,090,366
Related party costs, Paid		1,558,164	751,010
Related party costs, Payable		466,675	345,864
Transfer Agent fees
Related Party Transaction [Line Items]
Related party costs, Incurred		197,182	0
Related party costs, Paid		189,607	0
Related party costs, Payable		7,575	0
Asset management fees
Related Party Transaction [Line Items]
Related party costs, Incurred		4,085,859	5,346,280
Related party costs, Paid		4,001,045	5,346,280
Related party costs, Payable		84,814	0
Property management fees
Related Party Transaction [Line Items]
Related party costs, Incurred	[1]	3,601,324	5,285,082
Related party costs, Paid	[1]	3,510,257	5,285,082
Related party costs, Payable	[1]	91,067	0
Acquisition expenses
Related Party Transaction [Line Items]
Related party costs, Incurred		42,642	212,577
Related party costs, Paid		42,642	212,577
Related party costs, Payable		0	0
Acquisition costs
Related Party Transaction [Line Items]
Related party costs, Incurred		48,664	0
Related party costs, Paid		48,664	0
Related party costs, Payable		0	0
Selling commissions
Related Party Transaction [Line Items]
Related party costs, Incurred		0	966,516
Related party costs, Paid		0	966,516
Related party costs, Payable		0	0
Dealer manager fee
Related Party Transaction [Line Items]
Related party costs, Incurred		0	353,167
Related party costs, Paid		0	513,881
Related party costs, Payable		0	0
Stockholder servicing fee
Related Party Transaction [Line Items]
Related party costs, Incurred	[2]	0	299,299
Related party costs, Paid	[2]	507,910	690,272
Related party costs, Payable	[2]	2,112,130	2,620,040
Offering costs
Related Party Transaction [Line Items]
Related party costs, Incurred		0	33,466
Related party costs, Paid		0	33,466
Related party costs, Payable		$ 0	$ 0

[1] During the nine months ended September 30, 2018 and year ended December 31, 2017, property management fees included $0 and approximately $3.2 million, respectively, of fees paid to the sub-property manager of our properties. This includes the costs incurred related to the change in property management of approximately $0.8 million during 2017.

[2] We pay our Dealer Manager an ongoing stockholder servicing fee that is payable monthly and accrues daily in an amount equal to 1/365th of 1% of the purchase price per share of the Class T Shares sold in the Primary Offering.

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Summary of Related Party Costs (Parenthetical) (Detail) - USD ($)		3 Months Ended		9 Months Ended		12 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Related party costs, Incurred				$ 9,654,646		$ 13,586,753
Property operating expenses – affiliates		$ 2,571,670	$ 3,307,619	$ 7,687,183	$ 8,145,469
Dealer Manager | Class T Common stock
Related Party Transaction [Line Items]
Monthly stockholder servicing fee accrual description				accrues daily in an amount equal to 1/365th of 1% of the purchase price per share
Property management fees
Related Party Transaction [Line Items]
Related party costs, Incurred	[1]			$ 3,601,324		5,285,082
Property operating expenses – affiliates						800,000
Property management fees | Sub-property manager
Related Party Transaction [Line Items]
Related party costs, Incurred				$ 0		$ 3,200,000

[1] During the nine months ended September 30, 2018 and year ended December 31, 2017, property management fees included $0 and approximately $3.2 million, respectively, of fees paid to the sub-property manager of our properties. This includes the costs incurred related to the change in property management of approximately $0.8 million during 2017.

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Commitments and Contingencies - Additional Information (Detail) - USD ($)				1 Months Ended			9 Months Ended	12 Months Ended
	Oct. 31, 2018	Jan. 09, 2017	Nov. 30, 2016	Jul. 31, 2018	Apr. 30, 2018	Jan. 31, 2018	Sep. 30, 2018	Dec. 31, 2017	Apr. 19, 2018
Commitments And Contingencies [Line Items]
Additional shares issued pursuant to distribution reinvestment plan, value							$ 12,042,676
Redemptions of common stock (in shares)							700,000	200,000
Redemptions of common stock, value						$ 700,000	$ 324	$ 2,200,000
Subsequent Event
Commitments And Contingencies [Line Items]
Redemptions of common stock, value	$ 4,600,000
Distribution Reinvestment Plan
Commitments And Contingencies [Line Items]
Amendment, suspension or termination period for distribution reinvestment Plan							10 days
Sales commissions, dealer manager fee, or stockholder servicing fee payable							$ 0
Distribution Reinvestment Plan | Maximum
Commitments And Contingencies [Line Items]
Additional shares issued pursuant to distribution reinvestment plan, value			$ 100,900,000
Share Redemption Program
Commitments And Contingencies [Line Items]
Amendment, suspension or termination period of share							30 days
Maximum weighted-average number of shares outstanding percentage							5.00%
Redemptions of common stock (in shares)							700,000	200,000
Redemptions of common stock, value						$ 700,000	$ 7,000,000	$ 2,200,000
Share Redemption Program | Subsequent Event
Commitments And Contingencies [Line Items]
Redemptions of common stock, value	$ 4,600,000
Share Redemption Program | Minimum [Member]
Commitments And Contingencies [Line Items]
Shareholders share holding period							1 year
Operating Partnership Redemption Rights
Commitments And Contingencies [Line Items]
Number of shares issuable upon conversion of partnership units							1
Requisite minimum outstanding period for conversion eligibility							1 year
Class A and Class T Common Stock | Distribution Reinvestment Plan
Commitments And Contingencies [Line Items]
Estimated value per share under distribution reinvestment plan									$ 10.65
Class A Common stock | Distribution Reinvestment Plan
Commitments And Contingencies [Line Items]
Shares issued pursuant to distribution reinvestment plan		1,100,000					2,400,000
Class T Common stock | Distribution Reinvestment Plan
Commitments And Contingencies [Line Items]
Shares issued pursuant to distribution reinvestment plan		100,000					400,000
Redeemable Common Stock
Commitments And Contingencies [Line Items]
Additional shares issued pursuant to distribution reinvestment plan, value							$ 0
Redemptions of common stock, value				$ 2,300,000	$ 2,300,000		$ 6,978,799	1,500,000
Redeemable Common Stock | Share Redemption Program
Commitments And Contingencies [Line Items]
Redemptions of common stock, value				$ 2,300,000	$ 2,300,000			$ 1,500,000

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Stock for Redemptions Based on Number of Years Stock Held (Detail)	9 Months Ended
	Sep. 30, 2018
Less than 1
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Redemption price	0.00%
1 or more but less than 3
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Redemption price	90.00%
3 or more but less than 4
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Redemption price	95.00%
4 or more
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Redemption price	100.00%

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Declaration of Distributions - Additional Information (Detail) - $ / shares	Sep. 30, 2018	Sep. 20, 2018
Class A Common stock
Dividend Declared [Line Items]
Common stock per share outstanding per day declared		$ 0.001644
Cash distribution record date start	Oct. 01, 2018
Cash distribution record date end	Dec. 31, 2018
Class T Common stock
Dividend Declared [Line Items]
Common stock per share outstanding per day declared		$ 0.001644
Cash distribution record date start	Oct. 01, 2018
Cash distribution record date end	Dec. 31, 2018
Common stock dividend payable per share per day	$ 0.0014

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Selected Quarterly Data - Summary of Quarterly Financial Information (Detail) - USD ($)	3 Months Ended					9 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Schedule Of Quarterly Financial Information [Line Items]
Total revenues	$ 20,313,069	$ 20,045,516	$ 19,866,457	$ 19,385,071	$ 19,939,512	$ 60,225,042	$ 56,723,834
Total operating expenses	15,836,436	16,605,713	16,010,116	16,991,318	19,197,777	48,452,265	55,542,477
Operating income	4,476,633	3,439,803	3,856,341	2,393,753	741,735	11,772,777	1,181,357
Net loss	(457,278)	(1,437,330)	(667,047)	(2,351,155)	(3,875,164)	(2,561,655)	(12,635,135)
Net loss attributable to common stockholders	$ (451,424)	$ (1,427,056)	$ (661,203)	$ (2,329,515)	$ (3,840,775)	$ (2,539,683)	$ (12,534,550)
Class A Common stock
Schedule Of Quarterly Financial Information [Line Items]
Net loss per share-basic and diluted	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.04)	$ (0.07)	$ (0.04)	$ (0.22)
Class T Common stock
Schedule Of Quarterly Financial Information [Line Items]
Net loss per share-basic and diluted	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.04)	$ (0.07)	$ (0.04)	$ (0.22)

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Potential Merger - Additional Information (Detail) $ / shares in Units, ft² in Millions, $ in Millions	Oct. 01, 2018 USD ($) ft² StorageFacility State $ / shares shares	Sep. 30, 2018 State
Business Acquisition [Line Items]
Number of states located for self storage facilities | State		14
Subsequent Event
Business Acquisition [Line Items]
Number of self storage facilities | StorageFacility	28
Number of states located for self storage facilities | State	10
Net rentable square feet of storage space | ft²	2.1
Subsequent Event | Canada
Business Acquisition [Line Items]
Number of self storage facilities | StorageFacility	19,300
Strategic Storage Growth Trust, Inc | Subsequent Event
Business Acquisition [Line Items]
Sale price per share | $ / shares	$ 12.00
Total purchase price	$ 340.0
Number of self storage facilities | StorageFacility	2
Termination fee to be paid	$ 2.9
Reverse termination fee	9.6
Contingent consideration reverse termination fee	$ 9.6
SS Growth Operating Partnership, L.P | Subsequent Event
Business Acquisition [Line Items]
Business acquisition partnership units issued | shares	1.127

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Subsequent Events - Additional Information (Detail) shares in Millions				9 Months Ended
	Nov. 12, 2018 USD ($) shares	Oct. 29, 2018 USD ($)	Oct. 11, 2018 CAD ($) Extension	Sep. 30, 2018 USD ($) Extension	Sep. 30, 2017 USD ($)	Oct. 11, 2018 USD ($) Entity	Oct. 11, 2018 CAD ($) Entity	Sep. 30, 2017 CAD ($)	Mar. 31, 2017 CAD ($)	Feb. 01, 2017 CAD ($)	Feb. 18, 2016 USD ($)	Dec. 22, 2015 USD ($)
Subsequent Event [Line Items]
Gross proceeds from issuance of common stock				$ 0	$ 18,879,430
Derivative, notional amount								$ 101,000,000	$ 101,000,000	$ 58,500,000
Amended KeyBank Credit Facility
Subsequent Event [Line Items]
Maximum borrowings under credit facility				$ 145,000,000							$ 145,000,000	$ 105,000,000
Line of credit facility, description				The Amended KeyBank Credit Facility is a revolving loan with an initial term of three years, maturing on December 22, 2018, with two one-year extension options subject to certain conditions outlined further in the credit agreement for the Amended KeyBank Credit Facility (the “Amended Credit Agreement”). On October 29, 2018, we amended and restated our Amended KeyBank Credit Facility, extending the maturity date to February 20, 2019. See Note 12 - Subsequent Events. Payments due pursuant to the Amended KeyBank Credit Facility are interest-only for the first 36 months and a 30-year amortization schedule thereafter.
Line of credit facility, maturity date				Dec. 22, 2018
Line of credit facility, number of extension options | Extension				2
Line of credit facility, term of extension options				1 year
Subsequent Event | Amended KeyBank Credit Facility
Subsequent Event [Line Items]
Maximum borrowings under credit facility		$ 110,000,000
Line of credit facility, maturity date		Feb. 20, 2019
Canadian Debt Refinancing | Subsequent Event
Subsequent Event [Line Items]
Derivative, notional amount						$ 99,300,000
Effective interest rate cap on derivative instrument						3.00%	3.00%
Canadian Debt Refinancing | Subsequent Event | Canadian Citibank Loan Agreement
Subsequent Event [Line Items]
Number of special purpose entities | Entity						10	10
Maximum borrowings under credit facility							$ 112,000,000
Proceeds from line of credit			$ 99,300,000
Maximum remaining aggregate amount of borrowing							$ 12,700,000
Line of credit facility, description			Canadian Citibank Loan Agreement is a term loan that has a maturity date of October 9, 2020, which may, in certain circumstances, be extended at our option for three consecutive terms of one year each. Monthly payments are interest-only, with the full principal amount becoming due and payable on the maturity date
Line of credit facility, maturity date			Oct. 09, 2020
Line of credit facility, number of extension options | Extension			3
Line of credit facility, term of extension options			1 year
Line of credit, interest rate description			In general, the amounts outstanding bear interest at a rate equal to the sum of the “CDOR” (as defined in the Loan Agreement) and 2.25%.
Debt Instrument, Interest Rate						4.10%	4.10%
Class A Common stock | Distribution Reinvestment Plan Offering | Subsequent Event
Subsequent Event [Line Items]
Number of common stock issued | shares	2.5
Gross proceeds from issuance of common stock	$ 25,500,000
Class T Common stock | Distribution Reinvestment Plan Offering | Subsequent Event
Subsequent Event [Line Items]
Number of common stock issued | shares	0.4
Gross proceeds from issuance of common stock	$ 3,900,000