Blue Door Property III, DST Overview
Blue Door Property III, DST is a Regulation D, Rule 506(c) private placement offering $28,444,976 of beneficial interests in a newly formed Delaware statutory trust sponsored by Blue Door AM I, LLC, an affiliate of SmartStop Self Storage REIT, Inc. (NYSE: SMA). The Parent Trust owns 100% of three separate Operating Trusts, each of which owns a single income-producing self-storage facility operated under the SmartStop Self Storage brand. The portfolio comprises the Phoenix Property at 4860 North 83rd Avenue, Phoenix, AZ 85033 (711 storage units, 82,435 square feet); the Longwood Property at 460 Florida Central Parkway, Longwood, FL 32750 in the Orlando MSA (542 storage units plus 12 vehicle storage spaces, 65,740 square feet); and the Dallas Property at 8110 S. Cockrell Hill Road, Dallas, TX 75236 (674 storage units plus 24 modular outdoor storage units, 74,121 square feet) - approximately 1,927 storage units and 222,296 rentable square feet across 11.66 acres in three Sun Belt markets. The Parent Trust acquired the Properties on November 13, 2025 for an aggregate purchase price of $44,237,600, against an aggregate 'as-is' appraised value of $45,300,000. Each facility is net leased to an affiliated Master Tenant under a master lease and managed by Blue Door Property Management, LLC, an indirect subsidiary of SmartStop. The offering is designed primarily for accredited Section 1031 exchange investors seeking to defer capital gains taxation by acquiring like-kind replacement property, and also accepts cash investors, with a $100,000 minimum for Section 1031 investors and a $25,000 minimum for cash investors. The business plan is to operate the Properties for current income, maintain their long-term value, and ultimately sell or otherwise dispose of the portfolio before the November 13, 2032 loan maturity - potentially through a Section 721 contribution into the operating partnership of a SmartStop-affiliated non-traded REIT. Orchard Securities, LLC serves as Managing Broker-Dealer. The structure suits accredited investors who want passive, professionally managed self-storage exposure and can accept illiquidity and a multi-year hold.
Highlights
The offering assembles self-storage assets across three growth-oriented Sun Belt metropolitan areas rather than a single location. The Phoenix Property sits in the Phoenix MSA, where the appraiser concluded the property's trade area is under-supplied on both a quantitative and qualitative basis. The Longwood Property is located in Seminole County within the Orlando-Kissimmee-Sanford MSA, a tourism- and population-growth market anchored by theme-park investment, including Disney's planned $8 billion expansion over the coming decade. The Dallas Property lies in the southwest submarket of the Dallas-Plano-Irving MSA, home to a deep base of corporate headquarters, financial services, and favorable in-migration; the appraiser measured the Dallas Property's physical occupancy at 92.38%, above its trade-area average of roughly 90.50% and indicating localized under-supply. This three-market footprint spreads exposure across distinct regional economies while keeping the portfolio concentrated in demographically expanding areas with established storage demand.
The portfolio consists of three operating self-storage facilities totaling approximately 1,927 storage units, 24 modular outdoor storage units, and 12 vehicle storage spaces across 222,296 rentable square feet and 11.66 acres. All three facilities operate under the nationally recognized SmartStop Self Storage brand and are managed by Blue Door Property Management, LLC, an indirect subsidiary of SmartStop; prior to acquisition the Properties were operated by US Storage Centers, an unaffiliated third party. The assets were independently appraised at an aggregate 'as-is' value of $45,300,000 (Phoenix $20,300,000; Longwood $10,500,000; Dallas $14,500,000), modestly above the $44,237,600 aggregate purchase price. Property Condition Reports prepared by AEI Consultants in December 2024 support the physical condition of the facilities. Units are rented to space tenants on flexible month-to-month rental agreements, allowing rents to be adjusted to market, and the Dallas Property's measured 92.38% physical occupancy demonstrates existing, in-place cash flow across the portfolio.
The capital structure is moderately leveraged and pre-arranged, removing financing execution risk for investors. Total capitalization is $52,636,335, funded with $28,444,976 of equity (approximately 54%) and $24,191,359 of mortgage debt (approximately 46%). Each Operating Trust carries its own first-mortgage loan from SMST Lender, LLC - Phoenix $10,656,806, Longwood $5,741,932, and Dallas $7,792,621. The loans carry a fixed interest rate of 5.0% per annum, are interest-only for a seven-year term maturing November 13, 2032, and are non-recourse to investors, who bear no personal liability. Two twelve-month extension options are available (each subject to a 0.50% fee, with the extension rate set at SOFR plus 1.50%). Loan proceeds equate to roughly 55% of purchase price and about 53% of appraised value, and each $100,000 interest is allocated approximately $85,046 of debt - a meaningful factor for Section 1031 investors who must replace debt as well as equity to fully defer gain. A $3,022,900 reserve account is funded at closing for working capital and capital needs.
The sponsor is affiliated with SmartStop Self Storage REIT, Inc. (NYSE: SMA), one of the largest self-storage platforms in North America. According to the Inside Self Storage Top-Operators list for 2024, SmartStop is the 10th largest owner and operator of self-storage properties in the U.S. by number of properties, units, and rentable square footage. As of the memorandum date, SmartStop and its affiliates own or manage a portfolio of more than 460 properties across 34 states, the District of Columbia, and Canada, comprising approximately 270,000 units and 35 million rentable square feet. Importantly, the manager already operates a dense local cluster near these assets - 17 facilities in the Phoenix market, 13 in the Dallas-Fort Worth market, and 13 in The Villages and Orlando markets - providing regional scale, brand recognition, and revenue-management expertise. Day-to-day operations run through affiliated entities: Blue Door Advisors, LLC as Asset Manager, Blue Door Property Signatory III, LLC as Signatory Trustee, and Blue Door Property Management, LLC as Property Manager, aligning the offering with an institutional operating platform.
The offering is structured to serve accredited investors completing a Section 1031 exchange. Special Tax Counsel has provided an opinion that an investor's acquisition of an interest 'should' be treated as a direct acquisition of the Properties for purposes of Section 1031, allowing an investor to defer federal and state capital gains tax by exchanging relinquished property for a fractional interest in institutional real estate. Because the Delaware statutory trust holds pre-arranged debt, investors are allocated a pro rata share of the loans (approximately $85,046 per $100,000 interest), which can help satisfy the debt-replacement requirement of an exchange. The offering also provides a potential future tax-deferred exit: the Signatory Trustee may sell the Properties to the operating partnership of Strategic Storage Growth Trust III (SSGT III), a SmartStop-affiliated private non-traded REIT, in a transaction intended to qualify as a Section 721 contribution, allowing investors to elect cash, OP Units, or a mix. This 'UPREIT' pathway could offer continued tax deferral and a transition from single-asset ownership into a larger diversified REIT portfolio, subject to appraisal-based valuation and the sponsor's discretion.
Analysis of Blue Door Property III, DST
Insights
Blue Door Property III is a debt-replacement vehicle for 1031 exchangers first and a storage investment second — SmartStop-branded, stabilized cash flow sold for tax deferral, not yield. The coupon is deliberately thin: distributions open at 4.0%, reach just 4.52% by the 2032 maturity, and average ~4.28% — Meets Average on current income (~4.50% benchmark) and peak (~4.85%), but Below Average on growth, its ~13% climb trailing the ~14.9% norm. The 4.0% start sits below the deal's own 5.0% loan, so on ~46% interest-only leverage this is negative leverage on a cash basis; thin for the risk, and the 15.19% load is heavy. Yet the payout is real income: an ~8% cap-rate-equivalent against a 4% distribution (Dallas at 92.38% occupancy) means in-place NOI covers it nearly twice — a return of income, not of capital. The sponsor under-distributes on purpose to guard the exit. The loans balloon in full on November 13, 2032, so total return is a disposition-value story — an open-market sale or the optional Section 721 roll into SmartStop's SSGT III, valued by appraisal at the trustee's discretion, not the investor's. Watch the exit cap rate the memorandum concedes could compress value, and month-to-month rents that reprice down fast; a missed refinance springs an LLC and forfeits 1031 treatment. What the marketing buries is where the money goes: only ~$0.85 of each equity dollar reaches the buildings, the rest buying a 721 option that swaps an appraisable asset for illiquid, non-traded OP units at a sponsor-set price — inside a one-house structure where sponsor, lender, master tenants, and both managers are affiliates. Own it if you are an accredited exchanger needing the ~$85,046 of debt replacement per $100,000, wanting passive branded management and the UPREIT off-ramp, able to sit seven illiquid years. Pass if you want competitive yield, genuine diversification, or any say over the 2032 exit.
Advantages
Passive, institutionally managed exposure: investors gain a fractional interest in three operating self-storage facilities under the SmartStop brand, managed by an affiliate of a top-10 U.S. operator with more than 460 properties and roughly 270,000 units under ownership or management. Section 1031 eligibility: tax counsel opines the interest 'should' qualify as a direct real property acquisition, enabling deferral of capital gains, with a $100,000 minimum for exchangers. In-place income and geographic spread: the portfolio spans the Phoenix, Orlando (Longwood), and Dallas markets - Sun Belt metros with population growth - and the Dallas facility showed 92.38% physical occupancy, evidencing existing cash flow. Pre-arranged, moderate leverage: fixed-rate 5.0% interest-only loans totaling $24,191,359 (about 46% of total capitalization, roughly 53% of appraised value) are non-recourse to investors and mature in 2032 with two extension options, removing financing execution risk and providing an allocated ~$85,046 of debt per $100,000 to help satisfy exchange debt-replacement. Downside cushioning: a $3,022,900 reserve is funded at closing, and the aggregate appraised value of $45,300,000 exceeds the $44,237,600 purchase price. Flexible pricing power: month-to-month rental agreements let the manager reset rents to market. Optional tax-deferred exit: a potential Section 721 contribution into a SmartStop-affiliated non-traded REIT could let investors roll into OP Units and continue deferral. Aligned operating platform: the manager already runs 17 Phoenix, 13 Dallas-Fort Worth, and 13 Orlando-area facilities, offering local scale and revenue-management depth.
Concerns
An investment in the interests is speculative, illiquid, and suitable only for those who can bear a total loss. No liquidity or control: there is no public market for the interests, transfer is restricted under Regulation D, and investors have no right to participate in management, cannot remove the trustees except for cause, hold no legal title, and cannot force a sale - investors 'may not realize a return on their investment for years, if at all.' Limited fiduciary duties: under the Delaware Statutory Trust Act the trustees owe no fiduciary duty beyond an implied duty of good faith and fair dealing and may take actions not in investors' best interests. Concentration/lack of diversification: the investment is not diversified as to asset type (self-storage only), geography (three metros), or tenant mix. Self-storage industry risk: the sector experiences significant occupancy-rate fluctuations and has low barriers to entry and low capital requirements for competing supply; units rent month-to-month, so revenue can decline quickly. Master lease/affiliate risk: each Master Tenant is a Sponsor affiliate with limited capital that may fail to pay rent, and the trusts depend on the affiliated Property Manager to operate the assets; a Master Tenant bankruptcy would harm operations. Leverage and balloon risk: the interest-only loans reduce distributable cash and must be repaid or refinanced at the November 13, 2032 maturity; if the Properties cannot be sold or refinanced in time, a Transfer Distribution / conversion to a Springing LLC may occur, which would forfeit Section 1031 treatment on a later disposition, and a loan default could lead to foreclosure and loss. Fees and load: total selling commissions and expenses reach 10.5% of the offering, plus a $1,334,385 acquisition fee and ongoing asset-management and disposition fees paid regardless of investor distributions, and about 94% of proceeds fund acquisition costs and reserves - reducing capital deployed into real estate. Conflicts of interest: the lender, master tenants, property manager, broker-dealer compensation, and interest-owning affiliates are all related parties. Distribution risk: targeted distributions are not guaranteed and may be reduced or withheld to fund reserves. Tax risk: there is no IRS ruling, only a 'should' opinion; Section 1031 qualification depends on each investor's facts, tax-exempt investors will likely incur UBTI, and rising interest rates could reduce the Properties' exit value.
Blue Door Property III, DST — Complete Offering Data
Offering & Structure
Investment NameBlue Door Property III, DST
SponsorSmartStop
StructureDelaware Statutory Trust (DST)
Offering Type506(c)
StatusClosed
Last Updated2026-08-05
Size & Availability
Total Offering$52,636,335
Equity$28,444,976
Debt$24,191,359
Available Equity$0 (0% of equity)
Minimum Investment$100,000
Total Load15.19%
Initial Reserves5.74%
Property
Property TypeSelf-Storage
StrategyCore-Plus
LocationAZ, FL, TX
Market TierTier 1
Income & Projections
Average Yield4.28%
Projected Yields (Y1–Y10)Y1 4.00% · Y2 4.25% · Y3 4.27% · Y4 4.28% · Y5 4.31% · Y6 4.32% · Y7 4.52%
Tax-Adjusted Yield7.08%
Cap Rate Equivalent8.08%
Financing
In-Place LTV45.96% LTV
LenderSMST Lender, LLC
Loan TypeFixed
Interest Rate5.00% (Fixed)
Loan Term7 years
I/O Period7 years
AmortizationN/A (interest-only)
Y1 DSCR1.81x
Exit
Estimated Hold Period7 years
721 Exchange ExitOptional
Benchmarks (vs sector median)
Avg. Income4.28% vs 4.50% market — Meets Average
Growth13.00% vs 14.89% market — Below Average
Peak4.52% vs 4.85% market — Meets Average
Every data point Baker 1031 tracks for this offering, in one place. Figures are drawn from the offering’s private placement memorandum and sponsor materials unless noted, are summaries for convenience only, and are qualified in their entirety by the PPM. Tap the ⓘ icon next to any label for what it means and how it is calculated.
