EX-99.2 3 jcap-20190731ex9928dad42.htm EXHIBIT 99.2 jcap_Ex99_2

Exhibit 99.2

I:\Jernigan Capital Shared\Finance\Quarterly Close\2019\Q2 2019 Close Binder\Supplemental Package\Supplemental Cover Page for Word doc.png

 

 

 

Second Quarter 2019

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1

 

Forward Looking Statements

 

This Supplemental Information package contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in 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”)). These forward-looking statements include, without limitation, statements about our estimates, expectations, predictions and forecasts of our future business plans and financial and operating performance and/or results, including our third quarter and full-year 2019 earnings guidance and the assumptions underlying such guidance, our ability to successfully source, structure, negotiate and close investments in and acquisitions of self-storage facilities, the market dynamics of the MSAs in which our investments are located, our ability to fund our outstanding future investment commitments, our ability to own and manage our real estate assets, the availability, terms and our rate of deployment of equity capital and our ability to increase the borrowing base of our credit facility, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” or similar expressions or their negatives, as well as statements in future tense, we intend to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual financial and operating results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such differences are described in the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K, and those set forth in our other reports and information filed with the Securities and Exchange Commission (“SEC”), which factors include, without limitation, the following:

 

·

our ability to successfully source, structure, negotiate and close investments in and acquisitions of self-storage facilities;

·

changes in our business strategy and the market’s acceptance of our investment terms;

·

our ability to fund our outstanding and future investment commitments;

·

our ability to complete construction and obtain certificates of occupancy for self-storage development projects in which we invest;

·

the future availability for borrowings under our credit facility (including borrowing base capacity and the availability of the accordion feature);

·

availability, terms and our rate of deployment of equity and debt capital;

·

our manager’s ability to hire and retain qualified personnel;

·

the internalization of our Manager, which may or may not occur on the timeline anticipated or at all;

·

changes in the self-storage industry, interest rates or the general economy;

·

the degree and nature of our competition;

·

volatility in the value of our assets carried at fair market value;

·

potential limitations on our ability to pay dividends at historical rates;

·

limitations in our existing and future debt agreements on our ability to pay distributions;

·

the impact of our outstanding preferred stock on our ability to execute our business plan and pay distributions on our common stock; and

·

general volatility of the capital markets and the market price of our common stock.

 

Given these uncertainties, undue reliance should not be placed on our forward-looking statements. We assume no duty or responsibility to publicly update or revise any forward-looking statement that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events. We urge you to review the disclosures concerning risks in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K and in other documents that we file from time-to-time with the SEC.

 

Non-GAAP Financial Measures

 

Adjusted Earnings is a non-GAAP measure and is defined as net income attributable to common stockholders plus stock dividends to preferred stockholders, stock-based compensation expense, depreciation and amortization on real estate assets, depreciation and amortization on SL1 Venture real estate assets, and other expenses. Management uses Adjusted Earnings and Adjusted Earnings per diluted share as key performance indicators in evaluating the operations of the Company's business. The Company is a capital provider to self-storage developers and believes that these measures are useful to management and investors as a starting point in measuring its operational performance because they exclude various equity-based payments (including stock dividends) and other items included in net income that do not relate to or are not indicative of its present and future operating performance, which can make periodic and peer analyses of operating performance more difficult. The Company’s computation of Adjusted Earnings and Adjusted Earnings per share may not be comparable to other key performance indicators reported by other REITs or real estate companies. Reconciliations of Adjusted Earnings and Adjusted Earnings per share to Net income attributable to common stockholders and Earnings per share, respectively, are provided in the attached table entitled “Calculation of Adjusted Earnings.”

 

Second Quarter 2019

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Press Release – July 2019

 

Jernigan Capital Reports Second Quarter EPS and Adjusted EPS Above High End of Guidance Range,

Raises Full-Year 2019 Adjusted EPS Guidance and Tightens Full-Year 2019 EPS Guidance Range

 

MEMPHIS, Tennessee, July 31, 2019 / Business Wire / Jernigan Capital, Inc. (NYSE: JCAP), an owner of self-storage facilities and a leading capital partner for self-storage entrepreneurs nationwide, today announced results for the quarter ended June 30, 2019.

 

Second Quarter Highlights include:

 

§

Earnings per share and adjusted earnings per share of $0.46 and $0.65, respectively, both above the high end of guidance ranges provided with the Company’s first quarter 2019 earnings release;

 

§

Increased full year 2019 adjusted earnings per share guidance range to between $1.72 and $2.13 from the prior range of between $1.52 and $2.13 and adjusted full year 2019 earnings per share guidance range to between $0.93 and $1.34 from the prior range of $0.82 to $1.46;

 

§

Closed on two development investments, in Long Island, New York and Brooklyn, New York, with an aggregate commitment amount of $44.5 million;

 

§

Leasing commenced at Generation V self-storage facilities underlying six development property investments in which the Company has an aggregate committed investment of $74.5 million, 49.9% profits interests and ROFRs; and

 

§

Increased book value per common share to $19.12 at June 30, 2019 from $18.13 at June 30, 2018.

 

“Our second quarter results reflect another quarter of strong execution, with revenue, earnings per share and adjusted earnings per share exceeding the high end of our quarterly guidance ranges,” stated John Good, Chief Executive Officer of Jernigan Capital, Inc. “We posted 50% growth in total revenues and 38% growth in adjusted earnings compared to the second quarter of 2018. These results paired with better visibility into the back half of the year have led us to raise our Adjusted EPS guidance range for the full year 2019 and tighten our full year 2019 EPS guidance range.”

 

“Our portfolio of state-of-the-art Generation V self-storage properties continues to progress through construction and lease-up, with 52 facilities, representing 70% of self-storage projects that we have financed, open and operating as of the end of the second quarter,” continued Mr. Good. “These properties have continued to lease well during the summer rental season. Properties that were open as of the end of the first quarter added an average of 15.9% physical occupancy from the end of March through this past weekend. Occupancy is running approximately 600 basis points ahead of initial underwriting for our 46 properties that have been open for at least one leasing season.”

 

“We continue to see ample investment opportunities and expect the pace of acquisitions of developer interests in projects we have financed to increase in the second half of 2019 and throughout 2020,” Mr. Good continued. “As of July 31, 2019, we have committed over 83% of the midpoint of our full year 2019 investment guidance range of $85 million to $115 million. We continue to prudently manage our balance sheet, with our ratio of net debt to gross assets remaining at a low 13% level at quarter end and fundings of our investment commitments being fully-covered through mid-2020.”

 

Financial Highlights

 

Earnings per share and adjusted earnings per share for the three months ended June 30, 2019 were $0.46 and $0.65, respectively, which are each $0.21 above the high end of the Company’s guidance range provided in the Company’s first quarter 2019 earnings release. Earnings per share and adjusted earnings per share for the six months ended June 30, 2019 were $0.81 and $1.17, respectively.

 

Net income attributable to common stockholders for the three months ended June 30, 2019 was $9.8 million, an increase of $3.6 million, or 57%, over the $6.2 million net income attributable to common stockholders for the comparable quarter in 2018. Net income attributable to common stockholders for the six months ended June 30, 2019 was $16.9 million, an increase of $8.9 million, or 111%, over the $8.0 million reported for the comparable six month period in 2018.

 

Total revenues for the three and six months ended June 30, 2019 were $10.8 million and $20.7 million, respectively, representing increases of $3.6 million, or 50%, and $8.3 million, or 66%, over total revenues for the three and six months ended June 30, 2018, respectively. The increase in revenues is primarily attributed to the increase in the outstanding principal balances on the Company’s investment portfolio.

 

General and administrative expenses, excluding fees to the Manager, for the three and six months ended June 30, 2019 were $2.4 million and $4.1 million, compared to $2.0 million and $3.9 million for the comparable 2018 periods, respectively. Included in these amounts were stock-based compensation expense for the three and six months ended June 30, 2019 of $0.7 million and $1.0 million, compared to $0.8 million and $1.1 million for the comparable 2018 periods, respectively.

 

 

Second Quarter 2019

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Net income attributable to common stockholders and adjusted earnings for the three and six months ended June 30, 2019 also includes increases in the fair value of investments of $12.0 million and $20.9 million, respectively, compared to increases of $8.6 million and $12.9 million for the comparable periods in 2018. This represents a $3.4 million, or 40%, and $7.9 million, or 61%, year-over-year increase from the three and six months ended June 30, 2018, respectively.

 

Subsequent Events

 

On July 2, 2019, the Company entered into an agreement with the borrower on its Miami construction loan pursuant to which the Company acquired all of the interests in the entity that owns the property that secured the loan, and both parties dismissed all state court litigation related to that loan.

 

In July, the Company closed a new development investment in Queens, New York with a $13.1 million commitment.

 

Capital Markets Activities

 

During the second quarter, the Company issued an aggregate $30.6 million of common stock under the Company’s at-the-market program at an average share price of $21.04, a 10.6% premium to the Company’s reported book value per share as of March 31, 2019.

 

Dividends

 

On May 1, 2019, the Company declared cash and stock dividends on its Series A Preferred Stock. The cash dividend of $2.3 million was paid on July 15, 2019 to holders of record on July 1, 2019. A stock dividend of 2,125 shares of additional Series A Preferred Stock was issued on July 15, 2019 to holders of record on July 1, 2019 for an aggregate value of $2.1 million pursuant to the terms of the Stock Purchase Agreement.

On May 1, 2019, the Company declared a cash dividend on its Series B Preferred Stock. The cash dividend of $0.7 million was paid on July 15, 2019 to holders of record on July 1, 2019.

Additionally, on May 1, 2019, the Company declared a dividend of $0.35 per common share. The dividend was paid on July 15, 2019 to common stockholders of record on July 1, 2019.

 

Second Quarter 2019

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Third Quarter and Full-Year 2019 Guidance

 

The following table reflects earnings per share and adjusted earnings per share guidance ranges for the three months ending September 30, 2019 and updated guidance for the full-year 2019. Such guidance is based on management's current expectations of Company investment and acquisition activity (including fair value appreciation, the expected timing of construction progress and receipts of certificates of occupancy, and the assumptions regarding the timing of acquisitions of developer interests), the operational and new supply dynamics of the self-storage markets in which the Company has invested, and overall economic conditions, including interest rate levels. Adjusted earnings is a performance measure that is not specifically defined by accounting principles generally accepted in the United States (“GAAP”) and is defined as net income attributable to common stockholders (computed in accordance with GAAP) plus stock dividends to preferred stockholders, stock-based compensation expense, and depreciation and amortization on real estate assets. For more information about our calculation of adjusted earnings, see “Non-GAAP Financial Measures” below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dollars in thousands,

 

 

except share and per share data

 

 

Three months ending

 

Year ending

 

 

September 30, 2019

 

December 31, 2019

 

 

Low

 

High

 

Low

 

High

Interest income from investments

 

$

9,650

 

$

9,750

 

$

35,100

 

$

35,700

Rental revenue from real estate owned

 

 

1,700

 

 

1,800

 

 

7,900

 

 

8,200

Other income

 

 

35

 

 

40

 

 

340

 

 

360

Total revenues

 

$

11,385

 

$

11,590

 

$

43,340

 

$

44,260

G&A expenses (1)

 

 

(4,670)

 

 

(4,525)

 

 

(17,265)

 

 

(17,055)

Property operating expenses (excl. depreciation and amortization)

 

 

(950)

 

 

(900)

 

 

(4,250)

 

 

(3,950)

Depreciation and amortization on real estate assets

 

 

(1,300)

 

 

(1,250)

 

 

(6,150)

 

 

(6,050)

Interest expense

 

 

(2,500)

 

 

(2,400)

 

 

(8,500)

 

 

(8,250)

JV income

 

 

55

 

 

75

 

 

425

 

 

475

Other interest income

 

 

 5

 

 

10

 

 

30

 

 

40

Net unrealized gain on investments (2)

 

 

6,000

 

 

8,000

 

 

33,000

 

 

40,000

Net income

 

 

8,025

 

 

10,600

 

 

40,630

 

 

49,470

Net income attributable to preferred stockholders (3)

 

 

(5,170)

 

 

(5,160)

 

 

(20,500)

 

 

(20,450)

Net income attributable to common stockholders

 

 

2,855

 

 

5,440

 

 

20,130

 

 

29,020

Add: stock dividends

 

 

2,125

 

 

2,125

 

 

8,500

 

 

8,500

Add: stock-based compensation

 

 

570

 

 

550

 

 

2,185

 

 

2,150

Add: depreciation and amortization on real estate assets (4)

 

 

1,390

 

 

1,330

 

 

6,450

 

 

6,325

Adjusted earnings

 

$

6,940

 

$

9,445

 

$

37,265

 

$

45,995

Earnings per share – diluted

 

$

0.13

 

$

0.24

 

$

0.93

 

$

1.34

Adjusted earnings per share – diluted

 

$

0.31

 

$

0.42

 

$

1.72

 

$

2.13

Average shares outstanding – diluted

 

 

22,330,000

 

 

22,330,000

 

 

21,630,000

 

 

21,630,000

1)

Includes $2.2 million (low) / $2.1 million (high) of fees to Manager for the three months ending September 30, 2019. Includes $8.4 million (low) / $8.3 million (high) of fees to Manager for the year ending December 31, 2019.

2)

Excludes $0.04 million (low and high) of unrealized appreciation in fair value of investments from the real estate venture, which is included in JV income for the three months ending September 30, 2019 and $0.2 (low) / $0.3 (high) for the year ended December 31, 2019.

3)

Represents both cash dividends and stock dividends (which stock dividends will be paid out in either shares of the Company’s common stock or additional shares of Series A Preferred Stock, at the option of the Series A stockholders) estimated with respect to outstanding shares of Series A Preferred Stock, as well as cash dividends estimated with respect to outstanding shares of Series B Preferred Stock.

4)

Includes $0.1 million (low and high) of depreciation and amortization on the real estate assets wholly-owned by the real estate venture, which is included in JV income for the three months ending September 30, 2019 and $0.3 million (low and high) for the year ended December 31, 2019.

 

Full-Year Key Assumptions:

 

·

Projected closings on $85 million to $115 million of new self-storage investments for the full-year 2019, including acquisitions of developer interests (on-balance sheet and JCAP’s proportionate share in the SL1 Venture), new development property investments, new bridge investments and joint venture investments;

·

Fundings of approximately $200 million to $215 million on the Company’s closed and projected investment commitments during the year ending December 31, 2019, including cash payable for the acquisitions of developer interests; and

·

Utilization of the Company’s credit facility over the course of the year with expected borrowings at year-end of between $120 million and $160 million.

 

The Company is adjusting its previously issued guidance for full year 2019. Net income attributable to common stockholders is expected to be between $0.93 and $1.34 per share from the previously estimated range of $0.82 to $1.46 per share, and adjusted earnings is expected to be between $1.72 and $2.13 per share from the previously estimated range of $1.52 to $2.13 per share.

 

Additionally, the Company continues to monitor its 2019 fair value guidance with updated estimates of construction progress, timing of the receipt of certificates of occupancy from its development partners and the movement of interest rates and spreads. Of the estimated $33.0 million to $40.0 million of fair value appreciation in 2019, the Company recognized $8.8 million during the first quarter, $12.0 million in the

 

Second Quarter 2019

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second quarter, and expects $6.0 million to $8.0 million to be recognized in the third quarter, and $6.2 million to $11.2 million to be recognized in the fourth quarter. The Company’s 2019 fair value guidance reflects updated estimates of the timing of construction completion of the self-storage facilities underlying certain of our development investments, as well as the timing of stabilization of facilities in which we have invested. Timing of fair value appreciation is heavily dependent upon construction progress and the timing of construction completion, both of which are subject to factors outside the control of the Company and the Company’s development partners. Moreover, when the Company acquires the developer’s interest in a self-storage project that the Company has financed, the Company no longer accounts for such investment under the fair value method, so acquisitions of developer interests have a potentially material effect on future fair value recognized in the Company’s financial statements. As such, the amount and exact timing of fair value recognition is subject to change.

 

Second Quarter 2019

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Jernigan Capital, Inc.

Financial Highlights- Trailing Five Quarters

(unaudited, in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

2019

 

2019

 

2018

 

2018

 

2018

Operating Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, rental-related income and other revenues

 

$

10,832

 

$

9,884

 

$

9,666

 

$

9,091

 

$

7,241

JV income

 

 

85

 

 

156

 

 

58

 

 

440

 

 

435

Total revenues and JV income

 

 

10,917

 

 

10,040

 

 

9,724

 

 

9,531

 

 

7,676

General & administrative expenses

 

 

(4,442)

 

 

(3,765)

 

 

(4,375)

 

 

(3,599)

 

 

(3,616)

Property operating expenses of real estate owned

 

 

(786)

 

 

(762)

 

 

(508)

 

 

(473)

 

 

(420)

Depreciation and amortization of real estate owned

 

 

(1,090)

 

 

(1,029)

 

 

(982)

 

 

(854)

 

 

(887)

Interest expense

 

 

(1,776)

 

 

(1,213)

 

 

(634)

 

 

(467)

 

 

(638)

Subtotal

 

 

2,823

 

 

3,271

 

 

3,225

 

 

4,138

 

 

2,115

Realized gain on investments

 

 

 -

 

 

 -

 

 

 -

 

 

619

 

 

 -

Net unrealized gain on investments

 

 

12,043

 

 

8,830

 

 

18,942

 

 

11,060

 

 

8,623

Other interest income

 

 

 8

 

 

13

 

 

84

 

 

147

 

 

59

Net income

 

 

14,874

 

 

12,114

 

 

22,251

 

 

15,964

 

 

10,797

Net income attributable to preferred stockholders

 

 

(5,094)

 

 

(5,032)

 

 

(5,049)

 

 

(4,790)

 

 

(4,580)

Net income attributable to common stockholders

 

$

9,780

 

$

7,082

 

$

17,202

 

$

11,174

 

$

6,217

Plus: stock dividends to preferred stockholders

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

Plus: stock-based compensation

 

 

719

 

 

328

 

 

321

 

 

385

 

 

777

Plus: depreciation and amortization on real estate assets

 

 

1,090

 

 

1,029

 

 

982

 

 

854

 

 

887

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

82

 

 

56

 

 

 -

 

 

 -

 

 

 -

Adjusted Earnings

 

$

13,796

 

$

10,620

 

$

20,630

 

$

14,538

 

$

10,006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to common stockholders

 

$

0.46

 

$

0.35

 

$

0.87

 

$

0.58

 

$

0.40

Diluted earnings per share attributable to common stockholders

 

$

0.46

 

$

0.35

 

$

0.87

 

$

0.57

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings per share attributable to common stockholders – diluted

 

$

0.65

 

$

0.52

 

$

1.04

 

$

0.75

 

$

0.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.35

 

$

0.35

 

$

0.35

 

$

0.35

 

$

0.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

21,185,484

 

 

20,297,551

 

 

19,655,942

 

 

19,184,172

 

 

15,274,459

Diluted

 

 

21,387,462

 

 

20,455,116

 

 

19,816,194

 

 

19,459,751

 

 

15,564,317

Shares of common stock outstanding:

 

 

22,133,290

 

 

20,567,694

 

 

20,430,218

 

 

19,364,339

 

 

19,254,141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,169

 

$

3,860

 

$

8,715

 

$

42,624

 

$

43,331

Self-Storage Investment Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development property investments at fair value

 

 

476,889

 

 

405,999

 

 

373,564

 

 

335,509

 

 

302,245

Bridge investments at fair value

 

 

89,478

 

 

87,046

 

 

84,383

 

 

81,862

 

 

79,581

Operating property loans at fair value

 

 

 -

 

 

 -

 

 

 -

 

 

2,440

 

 

5,862

Self-storage real estate owned

 

 

112,099

 

 

111,297

 

 

100,099

 

 

74,444

 

 

61,896

Accumulated depreciation on self-storage real estate owned

 

 

(6,016)

 

 

(4,926)

 

 

(3,897)

 

 

(2,915)

 

 

(2,061)

Self-storage real estate owned, net

 

 

106,083

 

 

106,371

 

 

96,202

 

 

71,529

 

 

59,835

Investment in and advances to self-storage real estate venture

 

 

12,416

 

 

12,360

 

 

14,155

 

 

14,401

 

 

14,846

Total assets

 

 

703,292

 

 

630,632

 

 

590,408

 

 

556,228

 

 

509,860

Gross assets

 

 

709,308

 

 

635,558

 

 

594,305

 

 

559,143

 

 

511,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured revolving credit facility

 

 

62,900

 

 

27,000

 

 

 -

 

 

 -

 

 

 -

Term loans, net of unamortized costs

 

 

33,711

 

 

33,716

 

 

24,609

 

 

24,578

 

 

 -

Total liabilities

 

 

116,437

 

 

77,831

 

 

42,544

 

 

40,689

 

 

16,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

586,855

 

 

552,801

 

 

547,864

 

 

515,539

 

 

493,738

Common book value / common shares outstanding

 

$

19.12

 

$

19.02

 

$

19.01

 

$

18.38

 

$

18.13

 

 

Second Quarter 2019

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Jernigan Capital, Inc.

Consolidated Balance Sheets-Trailing Five Quarters

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

2019

 

2019

 

2018

 

2018

 

2018

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,169

 

$

3,860

 

$

8,715

 

$

42,624

 

$

43,331

Self-Storage Investment Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development property investments at fair value

 

 

476,889

 

 

405,999

 

 

373,564

 

 

335,509

 

 

302,245

Bridge investments at fair value

 

 

89,478

 

 

87,046

 

 

84,383

 

 

81,862

 

 

79,581

Operating property loans at fair value

 

 

 -

 

 

 -

 

 

 -

 

 

2,440

 

 

5,862

Self-storage real estate owned, net

 

 

106,083

 

 

106,371

 

 

96,202

 

 

71,529

 

 

59,835

Investment in and advances to self-storage real estate venture

 

 

12,416

 

 

12,360

 

 

14,155

 

 

14,401

 

 

14,846

Other loans, at cost

 

 

4,576

 

 

5,025

 

 

4,835

 

 

4,818

 

 

1,361

Deferred financing costs

 

 

4,327

 

 

4,404

 

 

4,619

 

 

1,503

 

 

1,644

Prepaid expenses and other assets

 

 

5,129

 

 

5,348

 

 

3,702

 

 

1,327

 

 

975

Fixed assets, net

 

 

225

 

 

219

 

 

233

 

 

215

 

 

180

Total assets

 

$

703,292

 

$

630,632

 

$

590,408

 

$

556,228

 

$

509,860

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured revolving credit facility

 

$

62,900

 

$

27,000

 

$

 -

 

$

 -

 

$

 -

Term loans, net of unamortized costs

 

 

33,711

 

 

33,716

 

 

24,609

 

 

24,578

 

 

 -

Due to Manager

 

 

2,453

 

 

2,267

 

 

3,334

 

 

2,309

 

 

1,887

Accounts payable, accrued expenses and other liabilities

 

 

4,526

 

 

2,612

 

 

2,402

 

 

2,235

 

 

2,916

Dividends payable

 

 

12,847

 

 

12,236

 

 

12,199

 

 

11,567

 

 

11,319

Total liabilities

 

$

116,437

 

$

77,831

 

$

42,544

 

$

40,689

 

$

16,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A Cumulative preferred stock

 

$

126,387

 

$

124,262

 

$

122,137

 

$

122,137

 

$

107,168

Series B Cumulative preferred stock

 

 

37,298

 

 

37,298

 

 

37,401

 

 

37,425

 

 

37,463

Common stock

 

 

221

 

 

205

 

 

204

 

 

193

 

 

192

Additional paid-in capital

 

 

419,760

 

 

389,431

 

 

386,394

 

 

364,108

 

 

361,636

Retained earnings (accumulated deficit)

 

 

3,630

 

 

1,605

 

 

1,728

 

 

(8,324)

 

 

(12,721)

Accumulated other comprehensive income (loss)

 

 

(441)

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Total equity

 

 

586,855

 

 

552,801

 

 

547,864

 

 

515,539

 

 

493,738

Total liabilities and equity

 

$

703,292

 

$

630,632

 

$

590,408

 

$

556,228

 

$

509,860

 

 

 

 

Second Quarter 2019

Picture 7

 

8

 

Jernigan Capital, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

 

 

Interest income from investments

 

$

9,150

 

$

6,403

 

$

17,362

 

$

10,965

Rental and other property-related income from real estate owned

 

 

1,638

 

 

805

 

 

3,087

 

 

1,428

Other revenues

 

 

44

 

 

33

 

 

267

 

 

64

Total revenues

 

 

10,832

 

 

7,241

 

 

20,716

 

 

12,457

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

2,373

 

 

2,034

 

 

4,136

 

 

3,852

Fees to Manager

 

 

2,069

 

 

1,582

 

 

4,072

 

 

2,886

Property operating expenses of real estate owned

 

 

786

 

 

420

 

 

1,549

 

 

731

Depreciation and amortization of real estate owned

 

 

1,090

 

 

887

 

 

2,119

 

 

1,589

Other expenses

 

 

 -

 

 

 -

 

 

 -

 

 

290

Total costs and expenses

 

 

6,318

 

 

4,923

 

 

11,876

 

 

9,348

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

4,514

 

 

2,318

 

 

8,840

 

 

3,109

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings from unconsolidated real estate venture

 

 

85

 

 

435

 

 

242

 

 

985

Net unrealized gain on investments

 

 

12,043

 

 

8,623

 

 

20,873

 

 

12,943

Interest expense

 

 

(1,776)

 

 

(638)

 

 

(2,989)

 

 

(1,054)

Other interest income

 

 

 8

 

 

59

 

 

21

 

 

168

Total other income

 

 

10,360

 

 

8,479

 

 

18,147

 

 

13,042

Net income

 

 

14,874

 

 

10,797

 

 

26,987

 

 

16,151

Net income attributable to preferred stockholders

 

 

(5,094)

 

 

(4,580)

 

 

(10,126)

 

 

(8,175)

Net income attributable to common stockholders

 

$

9,780

 

$

6,217

 

$

16,861

 

$

7,976

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to common stockholders

 

$

0.46

 

$

0.40

 

$

0.81

 

$

0.53

Diluted earnings per share attributable to common stockholders

 

$

0.46

 

$

0.40

 

$

0.81

 

$

0.53

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.35

 

$

0.35

 

$

0.70

 

$

0.70

 

 

Second Quarter 2019

Picture 7

 

9

 

Jernigan Capital, Inc.

Calculation of Adjusted Earnings and Reconciliation to Net Income Attributable to Common Stockholders

(unaudited, in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

2019

 

2019

 

2018

 

2018

 

2018

Net income attributable to common stockholders

 

$

9,780

 

$

7,082

 

$

17,202

 

$

11,174

 

$

6,217

Plus: stock dividends to preferred stockholders

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

Plus: stock-based compensation

 

 

719

 

 

328

 

 

321

 

 

385

 

 

777

Plus: depreciation and amortization on real estate assets

 

 

1,090

 

 

1,029

 

 

982

 

 

854

 

 

887

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

82

 

 

56

 

 

 -

 

 

 -

 

 

 -

Adjusted Earnings

 

$

13,796

 

$

10,620

 

$

20,630

 

$

14,538

 

$

10,006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings per share attributable to common stockholders – diluted

 

$

0.65

 

$

0.52

 

$

1.04

 

$

0.75

 

$

0.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding – diluted

 

 

21,387,462

 

 

20,455,116

 

 

19,816,194

 

 

19,459,751

 

 

15,564,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

June 30, 2019

 

June 30, 2018

Net income attributable to common stockholders

 

$

16,861

 

$

7,976

Plus: stock dividends to preferred stockholders

 

 

4,250

 

 

4,250

Plus: stock-based compensation

 

 

1,047

 

 

1,122

Plus: depreciation and amortization on real estate assets

 

 

2,119

 

 

1,589

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

137

 

 

 -

Plus: other expenses

 

 

 -

 

 

290

Adjusted Earnings

 

$

24,414

 

$

15,227

 

 

 

 

 

 

 

Adjusted Earnings per share attributable to common stockholders – diluted

 

$

1.17

 

$

1.01

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding – diluted

 

 

20,923,865

 

 

15,058,187

 

 

 

Second Quarter 2019

Picture 7

 

10

 

Jernigan Capital, Inc.

Third Quarter and Full Year 2019 Guidance

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dollars in thousands,

 

 

except share and per share data

 

 

Three months ending

 

Year ending

 

 

September 30, 2019

 

December 31, 2019

 

 

Low

 

High

 

Low

 

High

Interest income from investments

 

$

9,650

 

$

9,750

 

$

35,100

 

$

35,700

Rental revenue from real estate owned

 

 

1,700

 

 

1,800

 

 

7,900

 

 

8,200

Other income

 

 

35

 

 

40

 

 

340

 

 

360

Total revenues

 

$

11,385

 

$

11,590

 

$

43,340

 

$

44,260

G&A expenses (1)

 

 

(4,670)

 

 

(4,525)

 

 

(17,265)

 

 

(17,055)

Property operating expenses (excl. depreciation and amortization)

 

 

(950)

 

 

(900)

 

 

(4,250)

 

 

(3,950)

Depreciation and amortization on real estate assets

 

 

(1,300)

 

 

(1,250)

 

 

(6,150)

 

 

(6,050)

Interest expense

 

 

(2,500)

 

 

(2,400)

 

 

(8,500)

 

 

(8,250)

JV income

 

 

55

 

 

75

 

 

425

 

 

475

Other interest income

 

 

 5

 

 

10

 

 

30

 

 

40

Net unrealized gain on investments (2)

 

 

6,000

 

 

8,000

 

 

33,000

 

 

40,000

Net income

 

 

8,025

 

 

10,600

 

 

40,630

 

 

49,470

Net income attributable to preferred stockholders (3)

 

 

(5,170)

 

 

(5,160)

 

 

(20,500)

 

 

(20,450)

Net income attributable to common stockholders

 

 

2,855

 

 

5,440

 

 

20,130

 

 

29,020

Add: stock dividends

 

 

2,125

 

 

2,125

 

 

8,500

 

 

8,500

Add: stock-based compensation

 

 

570

 

 

550

 

 

2,185

 

 

2,150

Add: depreciation and amortization on real estate assets (4)

 

 

1,390

 

 

1,330

 

 

6,450

 

 

6,325

Adjusted earnings

 

$

6,940

 

$

9,445

 

$

37,265

 

$

45,995

Earnings per share – diluted

 

$

0.13

 

$

0.24

 

$

0.93

 

$

1.34

Adjusted earnings per share – diluted

 

$

0.31

 

$

0.42

 

$

1.72

 

$

2.13

Average shares outstanding – diluted

 

 

22,330,000

 

 

22,330,000

 

 

21,630,000

 

 

21,630,000

 

1)

Includes $2.2 million (low) / $2.1 million (high) of fees to Manager for the three months ending September 30, 2019. Includes $8.4 million (low) / $8.3 million (high) of fees to Manager for the year ending December 31, 2019.

2)

Excludes $0.04 million (low and high) of unrealized appreciation in fair value of investments from the real estate venture, which is included in JV income for the three months ending September 30, 2019 and $0.2 (low) / $0.3 (high) for the year ended December 31, 2019.

3)

Represents both cash dividends and stock dividends (which stock dividends will be paid out in either shares of the Company’s common stock or additional shares of Series A Preferred Stock, at the option of the Series A stockholders) estimated with respect to outstanding shares of Series A Preferred Stock, as well as cash dividends estimated with respect to outstanding shares of Series B Preferred Stock.

4)

Includes $0.1 million (low and high) of depreciation and amortization on the real estate assets wholly-owned by the real estate venture, which is included in JV income for the three months ending September 30, 2019 and $0.3 million (low and high) for the year ended December 31, 2019.

 

Full-Year Key Assumptions:

 

·

Projected closings on $85 million to $115 million of new self-storage investments for the full-year 2019, including acquisitions of developer interests (on-balance sheet and JCAP’s proportionate share in the SL1 Venture), new development property investments, new bridge investments and joint venture investments;

 

·

Fundings of approximately $200 million to $215 million on the Company’s closed and projected investment commitments during the year ending December 31, 2019, including cash payable for the acquisitions of developer interests; and

 

·

Utilization of the Company’s credit facility over the course of the year with expected borrowings at year-end of between $120 million and $160 million.

 

Of the estimated $33.0 million to $40.0 million of fair value appreciation in 2019, the Company recognized $8.8 million during the first quarter, $12.0 million in the second quarter, and expects $6.0 million to $8.0 million to be recognized in the third quarter, and $6.2 million to $11.2 million to be recognized in the fourth quarter. The Company’s 2019 fair value guidance reflects updated estimates of the timing of construction completion of the self-storage facilities underlying certain of our development investments, as well as the timing of stabilization of facilities in which we have invested. Timing of fair value appreciation is heavily dependent upon construction progress and the timing of construction completion, both of which are subject to factors outside the control of the Company and the Company’s development partners. Moreover, when the Company acquires the developer’s interest in a self-storage project that the Company has financed, the Company no longer accounts for such investment under the fair value method, so acquisitions of developer interests have a potentially material effect on future fair value recognized in the Company’s financial statements. As such, the amount and exact timing of fair value recognition is subject to change.

 

Second Quarter 2019

Picture 7

 

11

 

Jernigan Capital, Inc.

Schedule of Owned Properties

As of June  30, 2019
(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(MSA)

 

Date

 

Date

 

JCAP Capital

 

Size

 

Months

 

% Physical

Address

 

Opened

 

Acquired

 

Investment (1)

 

(NRSF) (2)

 

Open (3)

 

Occupancy (3)

Orlando 1/2
11920 W Colonial Dr.

 

5/1/2016

 

8/9/2017

 

$

12,047

 

93,965

 

39

 
89.5

%

Jacksonville 1
1939 East West Pkwy

 

8/12/2016

 

1/10/2018

 

 

8,686

 

59,848

 

36

 
92.1

%

Atlanta 2
340 Franklin Gateway SE

 

5/24/2016

 

2/2/2018

 

 

8,766

 

66,187

 

38

 
83.8

%

Atlanta 1
5110 McGinnis Ferry Rd

 

5/25/2016

 

2/2/2018

 

 

10,467

 

71,718

 

38

 
88.7

%

Pittsburgh
6400 Hamilton Ave

 

5/11/2017

 

2/20/2018

 

 

8,061

 

47,594

 

27

 
54.3

%

Charlotte 1
9323 Wright Hill Rd

 

8/18/2016

 

8/31/2018

 

 

10,525

 

85,350

 

35

 
64.0

%

New York City 1
1775 5th Ave

 

9/29/2017

 

12/21/2018

 

 

20,212

 

105,272

 

22

 
69.9

%

New Haven
453 Washington Ave

 

12/16/2016

 

3/8/2019

 

 

9,511

 

64,225

 

31

 
81.9

%

Total Owned Properties

 

 

 

$

88,275

 

594,159

 

 

 

 

 

(1)

JCAP Capital Investment represents the sum of the funded principal balance of the loan (net of unamortized origination fees), cash consideration (inclusive of transaction costs), assumed liabilities, net property working capital acquired, all as of the date of acquisition, and any capital costs spent after the date of acquisition.  The stabilized yield on our capital investment ranges from 7.5% to 8.5%.

(2)

The net rentable square feet (“NRSF”) includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces.

(3)

As of July  28, 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

Picture 5

 

 

 

Second Quarter 2019

Picture 7

 

12

 

Jernigan Capital, Inc.

Schedule of Completed Projects

As of June  30, 2019

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(MSA)

 

 

 

 

Funded

 

Unfunded

 

Fair

 

Size

 

Date

 

Months

 

% Physical

Closing Date

 

Address

 

Commitment

 

Investment

 

Commitment (1)

 

Value

 

(NRSF) (2)

 

Opened

 

Open (3)

 

Occupancy (3)

7/2/2015

 

Milwaukee
420 W St Paul Ave

 

$

7,650

 

$

7,648

 

$

 2

 

$

9,006

 

81,489

 

10/9/2016

 

34

 
72.6

%

10/27/2015

 

Austin
251 North A W Grimes Blvd

 

 

8,658

 

 

8,089

 

 

569

 

 

7,966

 

77,234

 

3/16/2017

 

28

 
87.1

%

8/14/2015

 

Raleigh
1515 Sunrise Ave

 

 

8,792

 

 

8,789

 

 

 3

 

 

8,635

 

60,171

 

3/8/2018

 

17

 
55.1

%

11/17/2016

 

Jacksonville 2
45 Jefferson Rd

 

 

7,530

 

 

7,405

 

 

125

 

 

9,471

 

70,255

 

3/27/2018

 

16

 
54.8

%

1/31/2017

 

Atlanta 4
4676 S Atlanta Rd

 

 

13,678

 

 

13,413

 

 

265

 

 

16,385

 

103,600

 

7/12/2018

 

13

 
39.1

%

2/24/2017

 

Orlando 3
12709 E Colonial Dr

 

 

8,056

 

 

7,491

 

 

565

 

 

9,255

 

69,645

 

7/26/2018

 

12

 
55.5

%

4/20/2017

 

Denver 2
3110 S Wadsworth Blvd

 

 

11,164

 

 

10,788

 

 

376

 

 

12,612

 

74,347

 

7/31/2018

 

12

 
34.5

%

6/29/2017

 

Boston 1 (4)
329 Boston Post Rd E

 

 

 -

 

 

 -

 

 

 -

 

 

2,867

 

90,553

 

8/8/2018

 

12

 
35.8

%

4/14/2017

 

Louisville 1
2801 N Hurstbourne Pkwy

 

 

8,523

 

 

7,294

 

 

1,229

 

 

8,821

 

65,786

 

8/15/2018

 

11

 
41.0

%

9/20/2016

 

Charlotte 2
1010 E 10th St

 

 

12,888

 

 

12,110

 

 

778

 

 

13,666

 

76,985

 

8/30/2018

 

11

 
42.2

%

9/28/2017

 

Louisville 2
3415 Bardstown Rd

 

 

9,940

 

 

9,151

 

 

789

 

 

11,213

 

76,603

 

8/31/2018

 

11

 
34.8

%

6/12/2017

 

Tampa 4
3201 32nd Ave S

 

 

10,266

 

 

9,218

 

 

1,048

 

 

12,256

 

72,765

 

10/9/2018

 

10

 
37.9

%

5/2/2017

 

Atlanta 6
2033 Monroe Dr

 

 

12,543

 

 

11,412

 

 

1,131

 

 

14,211

 

80,635

 

10/15/2018

 

9

 
29.6

%

7/27/2017

 

Jacksonville 3
2004 Edison Ave

 

 

8,096

 

 

7,391

 

 

705

 

 

9,242

 

68,100

 

11/6/2018

 

9

 
35.5

%

6/19/2017

 

Baltimore 1 (5)
1835 Washington Blvd

 

 

10,775

 

 

10,172

 

 

954

 

 

12,198

 

83,635

 

11/20/2018

 

8

 
24.3

%

5/19/2017

 

Tampa 3
2460 S Falkenburg Rd

 

 

9,224

 

 

7,949

 

 

1,275

 

 

9,559

 

70,474

 

11/29/2018

 

8

 
39.2

%

6/28/2017

 

Knoxville
130 Jack Dance St

 

 

9,115

 

 

8,317

 

 

798

 

 

9,728

 

72,490

 

11/30/2018

 

8

 
45.0

%

2/24/2017

 

New Orleans
2705 Severn Ave

 

 

12,549

 

 

11,469

 

 

1,080

 

 

13,494

 

86,545

 

12/21/2018

 

7

 
30.7

%

6/30/2017

 

New York City 2 (5)
465 W 150th St

 

 

27,982

 

 

27,221

 

 

1,996

 

 

29,920

 

40,951

 

12/28/2018

 

7

 
18.5

%

8/30/2017

 

Orlando 4
9001 Eastmar Commons

 

 

9,037

 

 

7,830

 

 

1,207

 

 

9,825

 

76,340

 

1/16/2019

 

6

 
39.2

%

2/8/2018

 

Minneapolis 2
3216 Winnetka Ave N

 

 

10,543

 

 

9,040

 

 

1,503

 

 

9,972

 

82,260

 

3/14/2019

 

4

 
25.4

%

12/1/2017

 

Boston 2
10 Hampshire Rd

 

 

8,771

 

 

7,176

 

 

1,595

 

 

8,764

 

76,146

 

3/19/2019

 

4

 
19.0

%

2/27/2017

 

Atlanta 5
56 Peachtree Valley Rd NE

 

 

17,492

 

 

16,114

 

 

1,378

 

 

19,307

 

87,485

 

4/8/2019

 

4

 
10.4

%

3/30/2018

 

Philadelphia (5)(6)
550 Allendale Rd

 

 

14,338

 

 

11,324

 

 

3,264

 

 

11,569

 

69,930

 

4/25/2019

 

3

 
18.0

%

3/1/2017

 

Fort Lauderdale
5601 NE 14th Ave

 

 

9,952

 

 

9,015

 

 

937

 

 

12,562

 

80,534

 

5/2/2019

 

3

 
20.7

%

5/2/2017

 

Tampa 2
9125 Ulmerton Rd

 

 

8,091

 

 

7,361

 

 

730

 

 

8,663

 

71,671

 

5/9/2019

 

3

 
21.5

%

3/1/2017

 

Houston
1050 Brittmoore Rd

 

 

14,825

 

 

14,549

 

 

276

 

 

17,536

 

128,466

 

5/21/2019

 

2

 
3.6

%

4/20/2017

 

Denver 1
6206 W Alameda Ave

 

 

9,806

 

 

8,136

 

 

1,670

 

 

9,629

 

56,580

 

6/28/2019

 

1

 
7.9

%

Total Completed Development Investments

 

$

300,284

 

$

275,872

 

$

26,248

 

$

328,332

 

2,151,675

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/2/2018

 

Miami 6
590 NW 137th Ave

 

$

13,370

 

$

13,370

 

$

 -

 

$

17,970

 

76,765

 

8/12/2016

 

36

 
88.6

%

3/2/2018

 

Miami 4
1103 SW 3rd Ave

 

 

20,201

 

 

20,201

 

 

 -

 

 

23,665

 

74,685

 

10/9/2016

 

34

 
94.4

%

3/2/2018

 

Miami 8
2434 SW 28th Lane

 

 

13,553

 

 

13,553

 

 

 -

 

 

14,396

 

51,923

 

12/12/2016

 

32

 
93.9

%

3/2/2018

 

Miami 7 (5)
18460 Pines Blvd

 

 

18,462

 

 

18,311

 

 

832

 

 

17,485

 

86,640

 

3/26/2018

 

16

 
59.4

%

3/2/2018

 

Miami 5 (5)
4001 NW 77th Ave

 

 

17,738

 

 

17,674

 

 

718

 

 

15,962

 

77,075

 

8/13/2018

 

12

 
39.8

%

Total Completed Bridge Investments

 

$

83,324

 

$

83,109

 

$

1,550

 

$

89,478

 

367,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Completed Projects

 

$

383,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter 2019

Picture 7

 

13

 

(1)

Commitment is fixed during underwriting at an amount deemed sufficient to cover interest carry and excess operating expenses over rental revenue during lease-up and deferred developer’s fees (if any) payable upon stabilization. Remaining unfunded commitment on completed projects is expected to be utilized primarily for such purposes. To the extent not needed for such purposes, such commitment will not be advanced.

(2)

The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces.

(3)

As of July  28, 2019.

(4)

This loan was repaid in full through a refinancing negotiated by our partner. The investment represents our 49.9% Profits Interest which was retained during the transaction.

(5)

The funded amount of these investments include PIK interest accrued on our loan or interest accrued on our preferred equity investment, as applicable. These interest amounts are not included in the commitment amount for each investment.

(6)

The Company has commenced foreclosure proceedings against the borrower.

 

Second Quarter 2019

Picture 7

 

14

 

Schedule of Projects in Progress

As of June  30, 2019

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

 

Estimated

 

 

(MSA)

 

 

 

 

Funded

 

Unfunded

 

Fair

 

Size

 

Construction

 

C/O

Closing Date

 

Address

 

Commitment

 

Investment

 

Commitment

 

Value

 

(NRSF) (1)

 

Start Date

 

Quarter (2)

1/18/2017

 

Atlanta 3 
1484 Northside Dr NW

 

$

14,115

 

$

10,973

 

$

3,142

 

$

12,966

 

92,935

 

Q4 2017

 

Q3 2019

9/14/2017

 

Los Angeles 1
959 W Hyde Park Blvd

 

 

28,750

 

 

9,230

 

 

19,520

 

 

9,395

 

120,038

 

Q4 2019

 

Q1 2021

9/14/2017

 

Miami 1
4250 SW 8th St

 

 

14,657

 

 

8,556

 

 

6,101

 

 

8,593

 

69,175

 

Q2 2018

 

Q1 2020

10/12/2017

 

Miami 2 (3)
880 W Prospect Rd

 

 

9,459

 

 

1,399

 

 

8,119

 

 

1,202

 

58,000

 

Q4 2019

 

Q3 2020

10/30/2017

 

New York City 3 (3)
5203 Kennedy Blvd

 

 

15,301

 

 

5,602

 

 

9,900

 

 

5,315

 

68,660

 

Q4 2017

 

Q3 2020

11/16/2017

 

Miami 3 (3)
120-132 NW 27th Ave

 

 

20,168

 

 

6,430

 

 

13,941

 

 

6,090

 

96,295

 

Q4 2018

 

Q2 2020

11/21/2017

 

Minneapolis 1
2109 University Ave W

 

 

12,674

 

 

7,950

 

 

4,724

 

 

9,046

 

88,348

 

Q2 2018

 

Q3 2019

12/15/2017

 

New York City 4
6 Commerce Center Dr

 

 

10,591

 

 

3,723

 

 

6,868

 

 

3,833

 

78,425

 

Q2 2018

 

Q1 2020

12/27/2017

 

Boston 3
19 Coolidge Hill Rd

 

 

10,174

 

 

2,653

 

 

7,521

 

 

2,553

 

62,700

 

Q1 2020

 

Q1 2021

12/28/2017

 

New York City 5
375 River St

 

 

16,073

 

 

9,440

 

 

6,633

 

 

10,308

 

90,700

 

Q4 2018

 

Q4 2019

4/6/2018

 

Minneapolis 3
101 American Blvd West

 

 

12,883

 

 

6,691

 

 

6,192

 

 

7,629

 

87,084

 

Q3 2018

 

Q4 2019

5/1/2018

 

Miami 9 (3)
10651 W Okeechobee Rd

 

 

12,421

 

 

3,344

 

 

9,171

 

 

3,242

 

70,538

 

Q3 2019

 

Q3 2020

5/15/2018

 

Atlanta 7
2915 Webb Rd

 

 

9,418

 

 

1,798

 

 

7,620

 

 

1,797

 

76,519

 

Q3 2018

 

Q1 2020

5/23/2018

 

Kansas City
510 Southwest Blvd

 

 

9,968

 

 

4,500

 

 

5,468

 

 

5,065

 

76,751

 

Q3 2018

 

Q4 2019

6/7/2018

 

Orlando 5
7212 W Sand Lake Rd

 

 

12,969

 

 

4,977

 

 

7,992

 

 

5,491

 

76,518

 

Q4 2018

 

Q4 2019

6/12/2018

 

Los Angeles 2 (3)
7855 Haskell Ave

 

 

9,298

 

 

4,756

 

 

4,874

 

 

4,780

 

116,022

 

Q3 2019

 

Q4 2020

11/16/2018

 

Baltimore 2
8179 Ritchie Hwy

 

 

9,247

 

 

703

 

 

8,544

 

 

652

 

61,750

 

Q2 2019

 

Q3 2020

3/1/2019

 

New York City 6
435 Tompkins Ave

 

 

18,796

 

 

3,021

 

 

15,775

 

 

2,962

 

76,250

 

Q3 2019

 

Q4 2020

3/15/2019

 

Stamford (3)
370 West Main St

 

 

2,904

 

 

2,963

 

 

 -

 

 

2,975

 

38,650

 

Q2 2019

 

Q4 2019

4/18/2019

 

New York City 7 (3)
14 Merrick Rd

 

 

23,462

 

 

5,770

 

 

17,726

 

 

5,484

 

95,331

 

Q3 2019

 

Q3 2020

5/8/2019

 

New York City 8 (3)
74 Bogart St

 

 

21,000

 

 

21,214

 

 

 -

 

 

21,446

 

193,763

 

Q1 2020

 

Q3 2021

Total Development Investments in Progress

 

$

294,328

 

$

125,693

 

$

169,831

 

$

130,824

 

1,794,452

 

 

 

 

(1)

The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces.

(2)

Estimated C/O dates represent the Company’s best estimate as of June  30, 2019 based on project specific information learned through underwriting and communications with respective developers. These dates are subject to change due to unexpected project delays/efficiencies.

(3)

The funded amount of these investments include PIK interest accrued on our loan or interest accrued on our preferred equity investment, as applicable. These interest amounts are not included in the commitment amount for each investment.

 

Second Quarter 2019

Picture 7

 

15

 

Schedule of Heitman JV Owned Properties and Development Projects Completed

As of June  30, 2019

(unaudited, dollars in thousands)

 

JV Owned Properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(MSA)

 

Date

 

Date

 

JV Capital

 

Size

 

Months

 

% Physical

Address

 

Opened

 

Acquired

 

Investment (1)

 

(NRSF) (2)

 

Open (3)

 

Occupancy (3)

Jacksonville
3211 San Pablo Rd S

 

7/26/2017

 

1/28/2019

 

$

12,564

 

80,621

 

24

 
87.0

%

Atlanta 2
11220 Medlock Bridge Rd

 

9/14/2017

 

1/28/2019

 

 

10,079

 

70,139

 

22

 
66.5

%

Denver
2255 E 104th Ave

 

12/14/2017

 

1/28/2019

 

 

13,899

 

85,575

 

19

 
64.4

%

Atlanta 1
1801 Savoy Dr

 

4/12/2018

 

1/28/2019

 

 

11,770

 

71,147

 

16

 
53.5

%

Total Owned Properties

 

 

 

$

48,312

 

307,482

 

 

 

 

 

(1)

JV Capital Investment represents the sum of the funded principal balance of the loan (net of unamortized origination fees), cash consideration (inclusive of transaction costs), assumed liabilities, and net property working capital acquired, all as of the date of acquisition. The stabilized yield on our capital investment ranges from 7.5% to 8.5%.

(2)

The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces.

(3)

As of July  28, 2019.

 

Development Projects Completed:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(MSA)

 

 

 

 

Funded

 

Unfunded

 

Fair

 

Size

 

Date

 

Months

 

% Physical

Closing Date

 

Address

 

Commitment

 

Investment

 

Commitment (1)

 

Value

 

(NRSF) (2)

 

Opened

 

Open (3)

 

Occupancy (3)

9/28/2016

 

Columbia
401 Hampton St

 

$

9,199

 

$

9,071

 

$

128

 

$

9,996

 

70,935

 

8/23/2017

 

23

 
92.4

%

4/15/2016

 

Washington DC
1325 Kenilworth Ave NE

 

 

17,269

 

 

17,269

 

 

 -

 

 

20,162

 

90,325

 

9/25/2017

 

22

 
76.1

%

5/14/2015

 

Miami 1
490 NW 36th St

 

 

13,867

 

 

12,722

 

 

1,145

 

 

15,455

 

75,770

 

2/23/2018

 

17

 
64.5

%

12/22/2016

 

Raleigh
7710 Alexander Town Blvd

 

 

8,877

 

 

8,725

 

 

152

 

 

9,292

 

64,108

 

6/8/2018

 

14

 
50.9

%

9/25/2015

 

Fort Lauderdale
812 NW 1st St

 

 

13,230

 

 

12,898

 

 

332

 

 

17,034

 

87,384

 

7/26/2018

 

12

 
32.9

%

5/14/2015

 

Miami 2
1100 NE 79th St

 

 

14,849

 

 

14,518

 

 

331

 

 

15,676

 

74,140

 

10/30/2018

 

9

 
54.0

%

7/21/2016

 

New Jersey
6 Central Ave

 

 

7,828

 

 

6,964

 

 

864

 

 

8,302

 

59,010

 

1/24/2019

 

6

 
28.8

%

Total Completed Development Investments

 

$

85,119

 

$

82,167

 

$

2,952

 

$

95,917

 

521,672

 

 

 

 

 

 

 

(1)

Commitment is fixed during underwriting at an amount deemed sufficient to cover interest carry and excess operating expenses over rental revenue during lease-up and deferred developer’s fees (if any) payable upon stabilization. Remaining unfunded commitment on completed projects is expected to be utilized primarily for such purposes. To the extent not needed for such purposes, such commitment will not be advanced.

(2)

The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces.

(3)

As of July  28, 2019.

 

 

 

 

Second Quarter 2019

Picture 7

 

16

 

Summary of Investments

As of June 30, 2019

 

Closed Investments by Geography:

Picture 4

*Other markets include MSAs comprising of 2% (Baltimore, Fort Lauderdale, Houston, Louisville, Philadelphia,  Raleigh, and Washington DC) and 1% (Austin, Columbia, Kansas City, Knoxville, Milwaukee, New Haven, New Orleans, Pittsburgh, and Stamford) of total closed investments.

 

Status of Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

# Properties

 

# of Properties Open and Operating

 

# of Properties Under Construction

 

Size (NRSF)

 

 

Total JCAP Investment Commitment

On-balance sheet

 

 

 

 

 

 

 

 

 

 

 

Wholly Owned Assets

8

 

8

 

0

 

594,159

 

$

88,275

 

Development Property Investments

49

 

28

 

21

 

3,946,127

 

$

594,612

 

Bridge Investments

5

 

5

 

0

 

367,088

 

$

83,324

 

Construction Loans (1)

1

 

0

 

1

 

71,953

 

$

17,733

Joint Venture

 

 

 

 

 

 

 

 

 

 

 

Wholly Owned Assets

4

 

4

 

0

 

307,482

 

$

4,831

 

Development Property Investments

7

 

7

 

0

 

521,672

 

$

8,512

(1)

On July 2, 2019, the Company entered into an agreement with the borrower on its Miami construction loan pursuant to which the Company acquired all of the interests in the entity that owns the property that secured the loan and both parties dismissed all state court litigation related to that loan.

 

 

Second Quarter 2019

Picture 7

 

17

 

Capital Sources and Investment Uses 

As of June  30, 2019

(dollars in millions)

 

 

 

 

 

 

 

 

Estimated Capital to be Used in Investing Activities (1)

 

 

 

Contractual investment obligations:

 

 

 

Development property investments

 

$

196

Bridge investments

 

 

 2

Total Committed Investments

 

$

198

Remaining Prospective Investments per FY 2019 guidance:

 

 

30

Total to Fund Investments

 

$

228

 

 

 

 

 

 

 

 

Estimated Sources of Capital

 

 

 

Cash and cash equivalents as of June 30, 2019

 

$

 4

Identified secured debt on one wholly-owned property

 

 

 7

Remaining credit facility capacity (2)

 

 

172

Remaining capital needs

 

 

45

Total Sources

 

$

228

(1)

Does not include financing spend or operating cash flow.

(2)

Assumes increase in the availability under the Credit Facility. As of June  30, 2019,  the Company had $162.9 million of total availability for borrowing under the Credit Facility ($100.0 million available after considering amounts outstanding).

 

The Company may use any combination of the following capital sources to fund additional capital needs:

 

·

Refinancing of JCAP mortgage indebtedness (49.9% profits interest and ROFR retained) –  $25 million to $50 million

·

Potential sales of facilities underlying current development investments to a third party –  $10 million to $20 million

·

Common Stock ATM issuances –  $40 million

·

Potential exercise of accordion feature of Credit Facility –  $165 million

 

 

 

Timing of Funding $228 million of Remaining and Prospective 2019 Investments

 

 

Picture 1

 

 

Second Quarter 2019

Picture 7

 

18

 

Capital Structure

As of June  30, 2019

(dollars in millions)

 

 

 

 

 

 

 

 

Credit Facility Outstanding

 

$

63

Term Loans

 

 

34

Series A Preferred Stock

 

 

129

Series B Preferred Stock

 

 

39

Common Stock

 

 

454

Total Capital

 

$

719

 

 

Picture 9

 

 

 

Second Quarter 2019

Picture 7

 

19

 

Jernigan Capital, Inc.

 

Company Information

 

 

 

 

 

 

 

Corporate Headquarters

 

Trading Symbol

 

Investor Relations

 

Information Requests

6410 Poplar Avenue

 

Common shares: JCAP

 

6410 Poplar Avenue

 

To request an Investor Relations

Suite 650

 

7.00% Series B Preferred Stock: JCAP-PR B

 

Suite 650

 

package or annual report, please

Memphis, TN 38119

 

Stock Exchange Listing

 

Memphis, TN 38119

 

visit our website at

901.567.9510

 

New York Stock Exchange

 

901.567.9510

 

www.jernigancapital.com

 

 

 

 

 

 

 

 

 

 

 

Executive Management

 

 

 

Dean Jernigan

 

John A. Good

Executive Chairman

 

Chief Executive Officer

 

 

 

Jonathan Perry

 

Kelly P. Luttrell

President and Chief Investment Officer

 

Senior Vice President, Chief Financial Officer, Treasurer and

 

 

Corporate Secretary

 

 

 

David Corak

 

Billy Perry

Senior Vice President of Corporate Finance

 

Senior Vice President of Investment Management

 

 

 

Independent Directors

 

 

 

Randall L. Churchey

 

Mark O. Decker

Director

 

Director

 

 

 

James D. Dondero

 

Rebecca Owen

Director

 

Director

 

 

 

Howard A. Silver

 

Harry J. Thie

Director

 

Director

 

 

 

Equity Research Coverage

 

 

 

Baird Equity Research

 

B. Riley FBR

RJ Milligan

 

Tim Hayes

rjmilligan@rwbaird.com

 

timothyhayes@brileyfbr.com

 

 

 

Jefferies LLC

 

KeyBanc Capital Markets

Jonathan Petersen

 

Todd M. Thomas

jpetersen@jefferies.com

 

tthomas@key.com

 

 

 

Raymond James & Associates

 

 

Jonathan Hughes

 

 

jonathan.hughes@raymondjames.com

 

 

 

Any opinions, estimates, forecasts or predictions regarding Jernigan Capital’s performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Jernigan Capital or its management. Jernigan Capital does not by its reference above or distribution imply its endorsement of or concurrence with such opinions, estimates, forecasts or predictions.

 

 

Second Quarter 2019

Picture 7

 

20