Strategic Storage Trust - Investment Opportunity

Questions and Answers

Below we have provided some of the more frequently asked questions and answers relating to an offering of this type. Please see "Prospectus Summary" and the remainder of the prospectus for more detailed information about this offering.

Q: What is a real estate investment trust?

A: In general, a real estate investment trust, or REIT, is a company that:

combines the capital of many investors to acquire or provide financing for commercial real estate;
allows individual investors the opportunity to invest in a diversified portfolio of real estate under professional management avoids the "double taxation" treatment of income that generally results from investments in a corporation because a REIT generally is not subject to federal corporate income taxes on its net income, provided certain income tax requirements are satisfied.
pays distributions to investors of at least 90% of its taxable income; and
avoids the "double taxation" treatment of income that generally results from investments in a corporation because a REIT generally is not subject to federal corporate income taxes on its net income, provided certain income tax requirements are satisfied.

Q: What is Strategic Storage Trust, Inc.?

A: Strategic Storage Trust, Inc. is a Maryland corporation that elected to qualify as a REIT for federal income tax purposes for the taxable year ended December 31, 2008. We do not have any employees and are externally managed by our advisor, Strategic Storage Advisor, LLC.

Q: What is your acquisition strategy?

A: We intend to invest a substantial amount of the net proceeds we raise in this offering in self storage facilities and related self storage real estate investments throughout the United States. We may also invest a portion of the net proceeds in self storage facilities outside the United States. Self storage facilities are properties that offer do-it-yourself, month-to-month storage space rental for personal or business use. According to the Self Storage Association's Self Storage Industry Fact Sheet, the self storage industry in the United States consists of approximately 2.35 billion rentable square feet at approximately 51,250 facilities. The industry is highly fragmented, and is comprised mainly of local operators and a few national owners and operators, including, we believe, only four publicly-traded self storage REITs. We believe the following factors will allow us to achieve market penetration, name recognition and national brand awareness and loyalty in the self storage industry, which will result in greater economies of scale:

the size and diversification of our self storage portfolio, which currently consists of 24 properties in 13 states with approximately 16,375 units and approximately 2.2 million square feet;
the management team of our advisor and property manager which, in addition to our executive officers described in the prospectus, includes regional and district property management professionals and on-site property management personnel; and
our self storage branding strategy whereby we intend to re-brand every self storage facility under the "SmartStop^(SM) Self Storage" brand over the next several years and the roll-out of the new customer-friendly self storage website www.strategicselfstorage.com which allows potential self-storage customers to locate available units at any of our properties.

Q: What is your strategy for use of debt?

A: In light of the current debt and interest rate environment, we intend to use low leverage (less than 50%) to make our investments during this offering. However, at certain times during this offering, our debt leverage levels may be temporarily higher as we acquire properties in advance of funds being raised in this offering. Our board of directors will regularly monitor our investment pipeline in relation to our projected fundraising efforts and otherwise evaluate market conditions related to our debt leverage ratios throughout this offering.

Q: Do you currently own any self storage facilities?

A: Yes. As of September 30, 2009, we owned 24 properties in 13 states with an aggregate of approximately 16,375 self storage units and approximately 2.2 million rentable square feet.

Q: How many shares do you currently have outstanding?

A: As of September 30, 2009, we have approximately 13.8 million shares of common stock issued and outstanding. Through September 30, 2009, we have received aggregate gross offering proceeds of approximately $75.9 million from the sale of approximately 7.6 million shares in our initial public offering. In addition to this offering, we also issued approximately 6.2 million unregistered shares in connection with two mergers with private real estate investment trusts sponsored by our sponsor.

Q: What will you do with the money raised in this offering?

A: We will use your net investment proceeds to primarily make self storage investments pursuant to our acquisition strategy. We will primarily focus on investments that produce current income. The diversification of our portfolio is dependent upon the amount of proceeds we receive in this offering. If we sell the maximum offering, we estimate that approximately 88.25% of the money you invest will be used to primarily make investments in self storage facilities and related self storage real estate investments and pay real estate-related acquisition fees and acquisition expenses, while the remaining 11.75% will be used to pay sales commissions, dealer manager fees and other organization and offering expenses. We expect our acquisition fees and acquisition expenses to constitute approximately 2.99% of our gross offering proceeds, which will allow us to invest approximately 85.26% in real estate investments. We may also use net offering proceeds to pay down debt or make distributions if our cash flows from operations are insufficient. See "Estimated Use of Proceeds." Until we invest the proceeds of this offering pursuant to our acquisition strategy, we may invest in short-term, highly liquid or other authorized investments. Such short-term investments will not earn significant returns, and we cannot guarantee how long it will take to fully invest the proceeds in properties.

Q: How will you own the self storage properties?

A: Strategic Storage Operating Partnership, L.P., our subsidiary operating partnership, will own, directly or indirectly through one or more special purpose entities, all of the self storage properties that we acquire, other than the properties acquired in the two mergers with private REITs described below. We are the sole general partner of our operating partnership, and therefore, we completely control the operating partnership. This structure is commonly known as an UPREIT.

Q: What is an UPREIT?

A: UPREIT stands for "Umbrella Partnership Real Estate Investment Trust." An UPREIT is a REIT that holds all or substantially all of its properties through an operating partnership in which the REIT holds a controlling interest. Using an UPREIT structure may give us an advantage in acquiring properties from persons who might not otherwise sell their properties because of unfavorable tax results. Generally, a sale of property directly to a REIT, or a contribution in exchange for REIT shares, is a taxable transaction to the selling property owner. However, in an UPREIT structure, a seller of a property who desires to defer taxable gain on the sale of property may transfer the property to the UPREIT in exchange for limited partnership units in the UPREIT's operating partnership without recognizing gain for tax purposes.

Q: What is a taxable REIT subsidiary?

A: Our company is allowed to own up to 100% of the stock of taxable REIT subsidiaries that can perform activities unrelated to our leasing of self storage space to tenants or customers, such as third-party management, development and other independent business activities, as well as provide products and services to our tenants or customers. A taxable REIT subsidiary is a fully taxable corporation and may be limited in its ability to deduct interest payments made to us. In addition, we will be subject to a 100% penalty tax on certain amounts if the economic arrangements among our tenants and customers, our taxable REIT subsidiary and us are not comparable to similar arrangements among unrelated parties. We, along with Strategic Storage TRS, Inc., our wholly-owned subsidiary, made an election to treat Strategic Storage TRS, Inc. as a taxable REIT subsidiary. Strategic Storage TRS, Inc. will, among other things, conduct certain activities (such as selling packing supplies and locks and renting trucks or other moving equipment) that, if conducted by us, could cause us to receive non-qualifying income under the REIT gross income tests.

Q: If I buy shares will I receive distributions, and how often?

A: We expect to continue to pay distributions on a monthly basis to our stockholders. See "Description of Shares - Distribution Policy", and " - Distribution Declaration History."

Q: Will the distributions I receive be taxable as ordinary income?

A: Yes and no. Generally, distributions that you receive, including distributions that are reinvested pursuant to our distribution reinvestment plan, will be taxed as ordinary income to the extent they are from current or accumulated earnings and profits. We expect that some portion of your distributions may not be subject to tax in the year received because depreciation expense reduces taxable income but does not reduce cash available for distribution. In addition, we may make distributions using offering proceeds. The portion of your distribution that is not subject to tax immediately is considered a return of capital for tax purposes and will reduce the tax basis of your investment. This, in effect, defers a portion of your tax until your investment is sold or we are liquidated, at which time you would be taxed at capital gains rates. However, because each investor's tax considerations are different, we suggest that you consult with your tax advisor. You also should review the section of the prospectus entitled "Federal Income Tax Considerations."

Q: What kind of offering is this?

A: Through our dealer manager, we are offering a maximum of 100,000,000 shares of our common stock at $10.00 per share in our primary offering on a "best efforts" basis. We are also offering 10,000,000 shares of our common stock at $9.50 per share pursuant to our distribution reinvestment plan to those stockholders who elect to participate in such plan as described in the prospectus. We reserve the right to reallocate the shares of common stock we are offering between our primary offering and our distribution reinvestment plan. We commenced the initial public offering of shares of our common stock on March 17, 2008. Through September 30, 2009, we have received aggregate gross offering proceeds of approximately $75.9 million from the sale of approximately 7.6 million shares in our initial public offering. As of September 30, 2009, approximately 102.4 million shares remained available for sale to the public under our initial public offering, including shares available under our distribution reinvestment plan.

Q: How does a "best efforts" offering work?

A: When shares are offered to the public on a "best efforts" basis, the participating broker-dealers are only required to use their best efforts to sell the shares and have no firm commitment or obligation to purchase any of the shares. Therefore, we may not sell all or any of the shares that we are offering.

Q: How long will this offering last?

A: The offering will not last beyond March 17, 2011. We reserve the right to terminate this offering at any time.

Q: Who can buy shares?

A: Generally, you may buy shares pursuant to the prospectus provided that you have either (1) a net worth of at least $70,000 and a gross annual income of at least $70,000, or (2) a net worth of at least $250,000. For this purpose, net worth does not include your home, furnishings and automobiles. Some states have higher suitability requirements. You should carefully read the more detailed description under "Suitability Standards" immediately following the cover page of the prospectus.

Q: For whom is an investment in our shares recommended?

A: An investment in our shares may be appropriate if you (1) meet the suitability standards as set forth above, (2) seek to diversify your personal portfolio with a finite-life, real estate-based investment, (3) seek to receive current income, (4) seek to preserve capital, (5) wish to obtain the benefits of potential long-term capital appreciation, and (6) are able to hold your investment for a long period of time. On the other hand, we caution persons who require liquidity or guaranteed income, or who seek a short-term investment.

Q: May I make an investment through my IRA, SEP or other tax-deferred account?

A: Yes. You may make an investment through your individual retirement account (IRA), a simplified employee pension (SEP) plan or other tax-deferred account. In making these investment decisions, you should consider, at a minimum, (1) whether the investment is in accordance with the documents and instruments governing your IRA, plan or other account, (2) whether the investment satisfies the fiduciary requirements associated with your IRA, plan or other account, (3) whether the investment will generate unrelated business taxable income (UBTI) to your IRA, plan or other account, (4) whether there is sufficient liquidity for such investment under your IRA, plan or other account, (5) the need to value the assets of your IRA, plan or other account annually or more frequently, and (6) whether the investment would constitute a prohibited transaction under applicable law.

Q: Is there any minimum investment required?

A: Yes. Generally, you must invest at least $1,000. Investors who already own our shares can make additional purchases for less than the minimum investment. Some states require a higher minimum investment. You should carefully read the more detailed description of the minimum investment requirements appearing under "Suitability Standards" immediately following the cover page of the prospectus.

Q: How do I subscribe for shares?

A: If you meet the suitability standards described herein and choose to purchase shares in this offering, you must complete a subscription agreement, like the one contained in the prospectus as Appendix B, for a specific number of shares and pay for the shares at the time you subscribe.

Q: May I reinvest my distributions?

A: Yes. Please see "Description of Shares - Distribution Reinvestment Plan" for more information regarding our distribution reinvestment plan.

Q: If I buy shares in this offering, how may I later sell them?

A: At the time you purchase the shares, they will not be listed for trading on any national securities exchange. As a result, if you wish to sell your shares, you may not be able to do so promptly or at all, or you may only be able to sell them at a substantial discount from the price you paid. In general, however, you may sell your shares to any buyer that meets the applicable suitability standards unless such sale would cause the buyer to own more than 9.8% of the value of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) or more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock. See "Suitability Standards" and "Description of Shares - Restriction on Ownership and Transfer." We are offering a share redemption program, as discussed under "Description of Shares - Share Redemption Program," which may provide limited liquidity for some of our stockholders; however, we may suspend or terminate our share redemption program if our board of directors determines that such program is not in the best interests of our stockholders.

Q: What are some of the more significant risks involved in an investment in your shares?

A: An investment in our shares is subject to significant risks. You should carefully consider the information set forth under "Risk Factors" beginning on page 16 for a discussion of the material risk factors relevant to an investment in our shares. Some of the more significant risks include the following:

We have a limited operating history and limited established financing sources, and we cannot assure you that we will be successful in the marketplace.
We have incurred operating losses to date and we anticipate that our operations will not be profitable in 2009.
Because this is a blind pool offering, you will not have the opportunity to evaluate our investments before we make them, which makes an investment in us more speculative.
There is currently no public trading market for our shares and there may never be one; therefore, it will be difficult for you to sell your shares.
Our ability to operate profitably will depend upon the ability of our advisor to efficiently manage our day-to-day operations.
If we pay distributions from sources other than our cash flow from operations, we will have less funds available for the acquisition of properties, and your overall return may be reduced.
Our advisor and its officers and certain of our key personnel will face competing demands relating to their time, and this may cause our operating results to suffer.
Our advisor will face conflicts of interest relating to the incentive fee structure under our advisory agreement, which could result in actions that are not necessarily in the long term best interests of our stockholders.
You are bound by the majority vote on matters on which you are entitled to vote and, therefore, your vote on a particular matter may be superseded by the vote of others.
Because our dealer manager is one of our affiliates, you will not have the benefit of an independent review of the prospectus or us customarily performed in underwritten offerings.
Payment of fees to our advisor and its affiliates will reduce cash available for investment and distribution.
Because we are focused on the self storage industry, our rental revenues will be significantly influenced by demand for self storage space generally, and a decrease in such demand would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio.
We will depend on our on-site personnel to maximize customer satisfaction at each of our facilities; and any difficulties we encounter in hiring, training and retaining skilled field personnel may adversely affect our rental revenues.
Adverse economic conditions will negatively affect our returns and profitability.
Disruptions in the credit markets could have a material adverse effect on our results of operations, financial condition and ability to pay distributions to you.
We may suffer reduced or delayed revenues for, or have difficulty selling, those properties with vacancies.
We may not be able to sell our properties at a price equal to, or greater than, the price for which we purchased such properties, which may lead to a decrease in the value of our assets.
High interest rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire and the amount of cash distributions we can make.
Failure to remain qualified as a REIT would adversely affect our operations and our ability to make distributions as we will incur additional tax liabilities.
You may have tax liability on distributions you elect to reinvest in our common stock.
There are special considerations that apply to pension or profit-sharing trusts or IRAs investing in our shares which could cause an investment to be a prohibited transaction which could result in additional tax consequences.

Q: Will I be notified of how my investment is doing?

A: Yes. We will provide you with periodic updates on the performance of your investment with us, including:

supplements to the prospectus during the offering period;
quarterly distribution reports;
an annual report; and
an annual IRS Form 1099.

We intend to provide annually the estimated value of our shares and to include this information in our annual report. Until 18 months after we have completed our last offering (excluding offerings under our distribution reinvestment plan), we intend to use the most recent price paid to acquire a share in our offering (ignoring purchase price discounts for certain categories of purchasers) as our estimated per share value of our shares. This estimated per share value may bear little relationship and will likely exceed what you might receive for your shares if you tried to sell them or if we liquidated our portfolio. See the "Risk Factors - Risks Related to this Offering and Our Corporate Structure" and the "Investment By Tax-Exempt Entities and ERISA Considerations - Annual Valuation Requirement' sections of the prospectus.

Q: When will I get my detailed tax information?

A: Your IRS Form 1099 will be placed in the mail by January 31 of each year.

Q: Who can help answer my questions?

A: If you have more questions about the offering or if you would like additional copies of the prospectus, you should contact your registered representative or contact:

U.S. Select Securities LLC | 1455 First Street, Suite 303 | Napa, California 94559 | Telephone: (877) 772-SSTI (7784)