Strategic Storage Trust VI, Inc. (SGST) stock intrinsic value fair value estimate & owner earnings analysis

WHAT THE BUSINESS IS. Strategic Storage Trust VI is a self-storage REIT whose shares are not listed on an exchange. Its sponsor, SmartStop, manages it and is paid for doing so. At the end of 2025 it owned 24 operating self-storage properties with about 2.1 million rentable square feet. They sit in seven U.S. states (Arizona, Delaware, Florida, Nevada, Oregon, Pennsylvania and Washington) and three Canadian provinces (Ontario, mostly the Greater Toronto Area, plus Alberta and British Columbia). It also had two development properties, one in Florida and one in Etobicoke, Ontario, and 50% stakes in Canadian development joint ventures. In 2025 revenue was $30.7 million, up 8.8%. After property costs and the property and asset management fees paid to the sponsor, the properties earned about $14.0 million. Corporate overhead of $6.2 million leaves roughly $7 to $8 million of cash a year before interest. The 12 same-store U.S. properties were 90.3% occupied and raised rent per occupied square foot by 3.2%. The newer, mostly Canadian group averaged 87.0% occupancy, up from 84.5%. HOW WE MEASURED EARNINGS. We started from the cash-flow statement and removed timing swings. The biggest was the sponsor deferring about $12 million of fees in 2023 and 2024, then being repaid $9.3 million of it in 2025. We treated spending on the Florida and Etobicoke developments as growth investment, not upkeep. On that basis the business generated $4.4 million before paying lenders in 2023, roughly breakeven in 2024 and $7.7 million in 2025. 2024 included $7.7 million of property spending that the filings do not break down; we treated most of it as upkeep. After interest, the company has burned cash in every year since it began operating in 2021. The company says all of its common distributions have been paid from share-sale proceeds, not from operations. Interest-rate hedge premiums were treated as part of the cost of borrowing. WHAT IT OWES. As of mid-2026: - About $293.5 million of mortgage and bank debt at a weighted rate of about 6.0%. This includes the $86.9 million Huntington term loan due November 30, 2027, whose rate is held down until then by a swap fixing SOFR at 2.29%, and a $25 million SmartStop bridge loan at 7.87% due June 30, 2027. - $153.1 million of Series B convertible preferred, including accrued dividends. It pays 8.35%, and if it is not redeemed the rate steps up 0.75% a year from May 2028 toward 11% and beyond. - $35.2 million of Series D preferred units, stepping from 6% up to 9%. Both preferred issues rank ahead of the common. Their coupons are well above our 6% rate, which we estimate adds about $54 million to what they cost over the next decade. Against this, the company has about $6 million of cash and joint-venture stakes carried at about $17 million. Interest of about $17.8 million and preferred dividends of about $14.6 million a year are far more than the business generates, so the company depends on continued share and preferred sales, sponsor support and its lenders. The 2027 maturities are the next test. BASE CASE. We start from $4.4 million, the middle of the last three years. Revenue grew 8.8% in 2025 and 5.6% in the first half of 2026. We let cash earnings grow 6% a year for three years, then 3% a year to year ten, and hold them flat after that because the buildings and land keep earning. The growth comes from three things already in evidence: rent increases like 2025's 3.2%, the Canadian properties moving from 87% occupancy toward the roughly 90% the U.S. properties already reach, and lease-up of the completed Etobicoke property. We gave no credit for new acquisitions or developments not yet under way. On this path the business is worth about $101 million, against about $513 million of debt and preferred claims net of cash and the joint-venture stakes. That is roughly -$412 million, or -$15.24 per share. BEAR CASE. Cash earnings stay near $2.5 million a year. This happens if 2024-style property spending recurs and the cost growth seen in the first half of 2026 persists; operating profit before depreciation ran at about $5.5 million a year then, against $7.0 million in 2025. The joint-venture stakes lose further value, and the 2027 maturities have to be refinanced once the Huntington swap ends. The business is worth about $42 million against about $522 million of claims: roughly -$480 million, or -$17.75 per share. BULL CASE. The 2025 level of $7.7 million becomes the new base. It grows 7% a year for three years and 4% a year to year ten as the Canadian portfolio stabilizes and pricing holds. The business is worth about $190 million against $513 million of claims: roughly -$323 million, or -$11.93 per share. WHAT THE SHARES ARE WORTH. In every case the company appears to owe more than the business is worth, by roughly $320 to $480 million, or $12 to $18 per share. On the cash the properties actually produce, the common shares have no value. Even the company's own measure of property operating income, $17.3 million, which is before asset management fees and corporate overhead, would be worth only about $290 million at our 6% rate. That is well short of the roughly $475 million of debt and preferred ahead of the common. The board's $10.00 estimated value rests on an appraisal of $681 million for the properties. That implies a yield of about 2.5% on today's operating income, which only works if income rises well beyond what the properties have produced so far. We do not give credit for that. The Series B's right to convert at $11.00 per share only matters if the common is worth more than that, so it does not change the picture. On these estimates there is no positive margin-of-safety price for the common. WHAT WOULD MAKE THIS WRONG. This could be wrong if the Canadian properties were sold at or near appraised values, if rents and occupancy rose far faster than the record so far, or if a recapitalization left the Series B holder with much less than its $153 million. None of these is contracted today. Two items could not be fully reconciled: the makeup of the 2024 property spending, and first-half 2026 results, which we took from the quarterly report's tagged financial data rather than the full text.