UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 19, 2018

Strategic Storage Growth Trust, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number:  000-55616

10 Terrace Road, Ladera Ranch, California 92694

(Address of principal executive offices, including zip code)

(877) 327-3485

(Registrant’s telephone number, including area code)

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☒

Item 7.01Regulation FD Disclosure

Stockholder Letter

On April 20, 2018, Strategic Storage Growth Trust, Inc. (the “Registrant”) issued a letter to its stockholders announcing the calculation of an estimated value per share for shares of the Registrant’s common stock, a change in the purchase price per share under the Registrant’s distribution reinvestment plan and a change in the distribution rate payable to the Registrant’s stockholders. A copy of the letter to stockholders is attached as Exhibit 99.1 to this Current Report on Form 8-K. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein is deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

Press Release

On April 20, 2018, the Registrant issued a press release announcing that the Registrant’s board of directors approved an estimated value per share for shares of the Registrant’s common stock and a change in the distribution rate payable to the Registrant’s stockholders. A copy of the press release is attached as Exhibit 99.2 to this Current Report on Form 8-K. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein is deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

Item 8.01Other Items

Calculation of Estimated Net Asset Value Per Share

Overview and Process

On April 19, 2018, the Registrant’s board of directors (the “Board”) approved an estimated value per share for the Registrantʼs Class A shares and Class T shares of $11.58 based on the estimated value of its assets less the estimated value of its liabilities, or net asset value, divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of December 31, 2017. The Registrant is providing this estimated value per share to assist broker-dealers in connection with their obligations under applicable Financial Industry Regulatory Authority (“FINRA”) rules with respect to customer account statements and to assist fiduciaries in discharging their obligations under Employee Retirement Income Security Act (“ERISA”) reporting requirements. This valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Guidelines”). The Board previously approved an estimated value per share of the Registrant’s Class A shares and Class T shares of $11.56 as of December 31, 2016.

The Registrantʼs Nominating and Corporate Governance Committee (the “Committee”), comprised of the Registrantʼs two independent directors, was responsible for the oversight of the valuation process, including the review and approval of the valuation process and methodology used to determine the estimated value per share, the consistency of the valuation methodology with real estate standards and practices, and the reasonableness of the assumptions used in the valuations and appraisals.  

The Committee approved the engagement of Duff & Phelps, LLC (“Duff & Phelps”), an independent third party real estate valuation and advisory firm, to provide valuation services for the Registrant’s assets and liabilities. In connection therewith, Duff & Phelps provided values for each of the Registrantʼs properties owned as of December 31, 2017 and a calculation of a range of the estimated value per share of its Class A shares and Class T shares as of December 31, 2017. The scope of work conducted by Duff & Phelps was in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute and each of the appraisals was prepared by Duff & Phelps personnel who are members of the Appraisal Institute and have the Member of

Appraisal Institute (“MAI”) professional designation. The Registrant previously engaged Duff & Phelps to assist the Board in determining the estimated value per share of the Registrant’s common stock as of December 31, 2016 and December 31, 2015. Additionally, beginning in 2017 the Registrant engaged Duff & Phelps to provide valuations in connection with its allocations of purchase price for Generally Accepted Accounting Principles (“GAAP”) purposes for certain of its acquisitions. Other than the engagements as described herein, Duff & Phelps does not have any direct or indirect material interest in any transaction with the Registrant or SS Growth Advisor, LLC (the “Advisor”), its advisor. The Registrant does not believe that there are any material conflicts of interest between Duff & Phelps, on the one hand, and the Registrant or the Advisor, on the other hand. The Registrant has agreed to indemnify Duff & Phelps against certain liabilities arising out of this engagement.

After considering all information provided, and based on the Committee’s extensive knowledge of the Registrantʼs assets and liabilities, the Committee concluded that the range in estimated value per share of $11.22 to $11.97, with an approximate mid-range value per share of $11.58, as indicated in the valuation report provided by Duff & Phelps (the “Valuation Report”) was reasonable and recommended to the Board that it adopt $11.58 as the estimated value per share for the Registrantʼs Class A shares and Class T shares. The Board unanimously agreed upon the estimated value per share of $11.58 recommended by the Committee, which determination is ultimately and solely the responsibility of the Board.

The table below sets forth the calculation of the Registrant’s estimated value per share as of December 31, 2017 and the Registrant’s previous estimated value per share as of December 31, 2016:

Methodology and Key Assumptions

In determining an estimated value per share, the Board considered information and analyses, including the Valuation Report provided by Duff & Phelps. The Registrantʼs goal in calculating an

estimated value per share is to arrive at a value that is reasonable and supportable using what the Board deems to be appropriate valuation methodologies and assumptions. The following is a summary of the valuation methodologies and assumptions used by the Board to value the Registrant’s assets and liabilities.

Real Estate Properties

The Registrant engaged Duff & Phelps to provide an appraisal, as of December 31, 2017, of its 24 self storage properties (the “Appraised Properties”). Duff & Phelps’ opinion of value used in calculating the estimated value per share above is based on the individual asset values of each of the Appraised Properties in the portfolio on the valuation date in accordance with the IPA Guidelines. The appraisal was not intended to estimate or calculate the Registrantʼs enterprise value. The appraisals were performed in accordance with the Uniform Standards of Professional Appraisal Practice, or USPAP, the real estate appraisal industry standards created by The Appraisal Foundation, as well as the requirements of the state where each real property is located. Each appraisal was reviewed, approved, and signed by an individual with the professional designation of MAI.

The scope of work by Duff & Phelps in performing the appraisal of the Appraised Properties included:

The income capitalization approach is a valuation technique that provides an estimation of the value of an asset based on market expectations about the cash flows that an asset would generate over its remaining useful life. The income capitalization approach begins with an estimation of the annual cash flows a market participant would expect the subject asset to generate over a discrete projection period. The estimated cash flows for each of the years in the discrete projection period are then capitalized at an appropriate rate to derive an estimate of value (the “direct capitalization method”) or converted to their present value equivalent using a market-oriented discount rate appropriate for the risk of achieving the projected cash flows (the “discounted cash flow method”). In the discounted cash flow method, the present value of the estimated cash flows are then added to the present value equivalent of the residual

value of the asset which is calculated based upon applying a terminal capitalization rate to the projected net operating income of the property at the end of the discrete projection period to arrive at an estimate of value. Duff & Phelps utilized the direct capitalization method for the Appraised Properties that were deemed stabilized and the discounted cash flow method for the Appraised Properties that were not deemed stabilized.

In utilizing the discounted cash flow method, Duff & Phelps estimated the value of the individual Appraised Properties primarily by using a multiple year discounted cash flow analysis. Duff & Phelps calculated the value of the individual Appraised Properties using the Registrantʼs historical financial data and forecasts going forward, terminal capitalization rates and discount rates that fall within ranges Duff & Phelps believes would be used by similar investors to value each of the Appraised Properties. The capitalization rates and discount rates were calculated utilizing methodologies that adjust for market specific information and national trends in self storage. As a test of reasonableness, Duff & Phelps compared the metrics of the valuation of the Appraised Properties to current market activity of self storage properties.

The Registrant acquired the 24 Appraised Properties for an aggregate purchase price plus development costs incurred for the three development properties of approximately $187.9 million. As of December 31, 2017, the total appraised midpoint value of the individual Appraised Properties as provided by Duff & Phelps using the valuation method described above was approximately $261.2 million. This represents an approximate 39% increase in the total value of the Appraised Properties over the aggregate purchase price and development costs.

The following summarizes the range of overall capitalization rates used by Duff & Phelps to arrive at the estimated market values of the Appraised Properties valued using the direct capitalization method:

The following summarizes the key assumptions that were used by Duff & Phelps in the discounted cash flow models to estimate the value of the Appraised Properties:

While the Registrant believes that Duff & Phelps’ assumptions and inputs are reasonable, a change in these assumptions and inputs would change the estimated value of the Appraised Properties. Assuming all other factors remain unchanged, a decrease in the overall capitalization rate used for the properties valued using the direct capitalization method of 50 basis points, together with a decrease in the terminal capitalization rate and discount rate used for the properties valued using the discounted cash flow method of 50 basis points would increase the value of the Appraised Properties to approximately $288.5 million. Similarly, an increase in the overall capitalization rate used for the properties valued using the direct capitalization method of 50 basis points, together with an increase in the terminal capitalization rate and discount rate used for the properties valued using the discounted cash flow method of 50 basis points would decrease the value of the Appraised Properties to approximately $237.9 million.  

Mortgage Debt

The estimated value of the aggregate mortgage debt was equal to the aggregate amount of all principal balances outstanding as of December 31, 2017. Duff & Phelps determined that the Registrant’s mortgage debt contained market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, and type of collateral and, accordingly, determined that no mark to market adjustment was required.

Other Assets and Liabilities

The carrying values of the majority of the other assets and liabilities were considered to equal their book value. Adjustments to exclude the GAAP basis carrying value of certain assets were made to other assets in accordance with the IPA Guidelines. The Registrant’s liability related to stockholder servicing fees has been valued using a liquidation value as of December 31, 2017. The estimated value per share for the Class T shares does not reflect any obligation to pay future stockholder servicing fees since such fees would cease upon liquidation.

Incentive Distribution

The estimated value of the incentive distribution payable to the Advisor and its affiliates is based on 15% of the amount by which the net asset value of the Registrant plus distribution paid exceeds a return of stockholders’ capital plus a 6% cumulative, non-compounded, annual return to the stockholders. At the midpoint estimated value per share, Duff & Phelps assumed payment of an incentive distribution and redemption of the applicable special limited partnership interest held by the Advisor.

Limitations of Estimated Value Per Share

FINRA rules provide no guidance on the methodology an issuer must use to determine its estimated value per share. As with any valuation methodology, the methodology considered by the Board is based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. Markets for real estate and real estate-related investments can fluctuate and values are expected to change in the future. The estimated value per share does not represent the fair value of the Registrantʼs assets less its liabilities according to GAAP nor does it represent a liquidation value of the Registrantʼs assets and liabilities or the amount at which the Registrantʼs shares of common stock would trade on a national securities exchange.  

Accordingly, with respect to the estimated value per share, the Registrant can give no assurance that:

Further, the estimated value per share is based on the estimated value of the Registrantʼs assets less the estimated value of its liabilities divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of December 31, 2017. The estimated net asset value per share was based upon 26,529,072 shares of equity interests outstanding as of December 31, 2017, which was comprised of (i) 18,942,639 outstanding shares of Class A common stock, plus (ii) 7,566,333 outstanding shares of Class T common stock, plus (iii) 20,100 outstanding OP Units, which OP Units are exchangeable on a one-for-one basis into shares of Class A common stock.

The value of the Registrantʼs shares will fluctuate over time in response to developments related to individual assets in the portfolio and the management of those assets, and in response to the real estate and finance markets.

Distribution Reinvestment Plan

In accordance with the Registrant’s distribution reinvestment plan, as amended (the “Plan”), the price per share pursuant to the Plan is equal to the estimated value per share approved by the Board and in effect on the date of purchase of shares under the Plan. In connection with the estimated value per share described herein, the Board approved a share price for the purchase of shares under the Plan equal to the estimated value per share of $11.58 for both Class A shares and Class T shares, to be effective for distribution payments being paid beginning in May 2018.

Third Quarter 2018 Distribution Declaration

On April 19, 2018, the Board declared a daily cash distribution in the amount of $0.0013698630 per day per share on the outstanding shares of common stock payable to stockholders of record of such shares as shown on the Registrant’s books as of the close of business on each day of the period commencing on July 1, 2018 and ending September 30, 2018. Such distributions payable to each stockholder of record during a month will be paid on such date of the following month as the Registrant’s Chief Executive Officer may determine.

Item 9.01.  Financial Statements and Exhibits

(d)  Exhibits

Signature(s)

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 hereunto duly authorized.