EX-99.2 3 jcap-20191030ex992ffc863.htm EXHIBIT 99.2 jcap_Ex99_2

Exhibit 99.2

I:\Jernigan Capital Shared\Finance\Quarterly Close\2019\Q3 2019 Close Binder\Supplemental Package\Supplemental cover page for Word doc.png

 

 

 

Third 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 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, our management team’s views of the self-storage market generally, 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, our ability to increase the borrowing base and use the accordion feature of our credit facility, our expectations about receiving certificates of occupancy on our properties and negotiations regarding the internalization of our advisor, which may not occur on favorable terms, or at all, and the continuance of our management agreement if internalization does not occur, 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, compliance with covenants 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, and the resulting outcome if no internalization transaction occurs, including any amendment to or termination of the Management Agreement;

·

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 or other changes to our historical dividend rate;

·

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 which are generally non-comparable and which represent expenses not substantially related to our ongoing business operations. 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.”

 

Third Quarter 2019

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Press Release – October 2019

 

 Jernigan Capital Reports Third Quarter EPS and Adjusted EPS Above High End of Guidance Range; Tightens Full-Year EPS Guidance Range and Raises Full-Year Adjusted EPS Guidance Range

 

MEMPHIS, Tennessee, October 30, 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 September 30, 2019.

 

Third Quarter Highlights include:

 

§

Earnings per share and adjusted earnings per share of $0.26 and $0.46, respectively, both above the high end of guidance ranges provided with the Company’s second quarter 2019 earnings release;

 

§

Tightened full year 2019 earnings per share guidance range to between $1.08 and $1.19 from the prior range of $0.93 to $1.34 and increased full year 2019 adjusted earnings per share guidance range to between $1.88 and $2.00 from the prior range of between $1.72 and $2.13;

 

§

Increased the number of wholly-owned self-storage facilities to 15 through developer buyouts of five self-storage facilities underlying the Company’s Miami bridge portfolio and the Company’s Jacksonville 2 development investment, as well as the acquisition of the interests in the entity that owned the property underlying the Company’s Miami construction loan;

 

§

Closed on two development investments, in Queens, New York and Nassau County, New York, with an aggregate commitment amount of $21.8 million, bringing aggregate 2019 investments to approximately $101 million, including commitments to new development and developer buyouts;

 

§

Commenced leasing of Generation V self-storage facilities underlying two development property investments located in Atlanta, Georgia and St. Paul, Minnesota in which the Company has an aggregate committed investment of $26.8 million, 49.9% profits interests and ROFRs; and

 

§

A special committee comprised entirely of independent members of the Company’s board of directors commenced discussions with JCAP Advisors, the Company’s external advisor, regarding a potential internalization transaction.

 

“Our third quarter results and investment activities reflect another quarter of strong execution of the Company’s business plan and further progress toward outright ownership of our outstanding portfolio of state-of-the-art Generation V self-storage properties,” stated John Good, Chief Executive Officer of Jernigan Capital, Inc. “Revenue, earnings per share and adjusted earnings per share exceeded the high end of our quarterly guidance ranges, and we posted 35% growth in total revenues compared to the third quarter of 2018. Our portfolio of self-storage facilities continues to progress well through construction and lease-up. As of quarter-end, 54 facilities, representing 71% of self-storage projects that we have financed to date, were open and operating. After a solid summer rental season, these properties have continued to lease up well into October. Occupancy is running approximately 290 basis points ahead of initial underwriting for our 46 properties that have been open for at least one leasing season.”

 

“We continue to see opportunities to acquire developer interests in our core development portfolio,” Mr. Good continued. “During the third quarter, we acquired the developers’ interests in seven of our investments, including the five facilities underlying the Miami bridge loan, our Jacksonville 2 project and our Miami construction loan. Year-to-date, we have made on-balance sheet purchases of our developers’ interests in eight projects and have purchased developers out of four additional projects within our Heitman joint venture. With those acquisitions, we now wholly-own, either on our balance sheet or with our venture partner, 19 state-of-the-art Generation V self-storage properties representing approximately 24% of the net rentable square feet in our overall portfolio. As the pace of acquisition opportunities accelerates, we expect to eventually wholly-own a substantial majority of the self-storage developments we have financed.”

 

“While we continue to strategically seek new development commitments in select markets around the United States, the sector is in the last innings of the development cycle,” added Jonathan Perry, President and Chief Investment Officer. “During the third quarter, we closed two new development investments in Queens, NY and Nassau County, NY, two submarkets that exhibit the compelling demographics that we expect will drive strong demand and excellent returns over time. With these development investment commitments and the seven acquisitions during the quarter, we have surpassed the midpoint of our full year 2019 investment guidance range.”

 

Financial Highlights

 

Earnings per share and adjusted earnings per share for the three months ended September 30, 2019 were $0.26 and $0.46, respectively, which are $0.02 and $0.04, respectively, above the high end of the Company’s guidance range provided in the Company’s second quarter 2019 earnings release. Earnings per share and adjusted earnings per share for the nine months ended September 30, 2019 were $1.06 and $1.62, respectively.

 

 

Third Quarter 2019

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Total revenues for the three and nine months ended September 30, 2019 were $12.2 million and $33.0 million, respectively, representing increases of $3.2 million, or 35%, and $11.4 million, or 53%, over total revenues for the three and nine months ended September 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 nine months ended September 30, 2019 were $2.1 million and $6.3 million, compared to $1.7 million and $5.6 million for the comparable 2018 periods, respectively. Included in these amounts were stock-based compensation expense for the three and nine months ended September 30, 2019 of $0.5 million and $1.6 million, compared to $0.4 million and $1.5 million for the comparable 2018 periods, respectively.

 

Net income attributable to common stockholders for the three months ended September 30, 2019 was $5.8 million, a decrease of $5.4 million, or 48%, over the $11.2 million net income attributable to common stockholders for the comparable quarter in 2018. The decrease from the comparable 2018 period is largely attributable to a decline in fair value accretion due to a smaller number of self-storage development projects achieving substantial completion in 2019 versus the comparable 2018 period. Net income attributable to common stockholders for the nine months ended September 30, 2019 was $22.7 million, an increase of $3.5 million, or 18%, over the $19.2 million reported for the comparable nine-month period in 2018.

 

Net income attributable to common stockholders and adjusted earnings for the three and nine months ended September 30, 2019 also includes increases in the fair value of investments of $8.0 million and $28.8 million, respectively, compared to increases of $11.1 million and $24.0 million, respectively, for the comparable periods in 2018. This represents a decrease of $3.1 million, or 28%, and an increase of $4.8 million, or 20%, year-over-year from the three and nine months ended September 30, 2018, respectively. The year-over-year reduction in the increases in the fair value of investments for the three months ended September 30, 2019 as compared to the same period in 2018 was primarily driven by the fact that fewer properties attained certificates of occupancy during the three months ended September 30, 2019 as compared to the three months ended September 30, 2018.

 

Capital Markets Activities

 

During the third quarter, the Company issued an aggregate $2.0 million of common stock under the Company’s at-the-market program at a weighted average share price of $20.68, an 8.2% premium to the Company’s reported book value per share as of June 30, 2019.

 

Dividends

 

On July 31, 2019, the Company declared cash and stock dividends on its Series A Preferred Stock. The cash dividend of $2.3 million was paid on October 15, 2019 to holders of record on October 1, 2019. A stock dividend of 2,125 shares of additional Series A Preferred Stock was issued on October 15, 2019 to holders of record on October 1, 2019 for an aggregate value of $2.1 million pursuant to the terms of the Stock Purchase Agreement.

On July 31, 2019, the Company declared a cash dividend on its Series B Preferred Stock. The cash dividend of $0.7 million was paid on October 15, 2019 to holders of record on October 1, 2019.

Additionally, on July 31, 2019, the Company declared a dividend of $0.35 per common share. The dividend was paid on October 15, 2019 to common stockholders of record on October 1, 2019.

 

Third Quarter 2019

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Full-Year 2019 Guidance

 

The following table reflects earnings per share and adjusted earnings per share guidance ranges 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, depreciation and amortization on real estate assets, and other expenses. For more information about our calculation of adjusted earnings, see “Non-GAAP Financial Measures” below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ending

 

 

December 31, 2019

 

 

Low

 

High

Interest income from investments

 

$

36,405

 

$

36,505

Rental revenue from real estate owned

 

 

8,125

 

 

8,225

Other income

 

 

350

 

 

355

Total revenues

 

$

44,880

 

$

45,085

G&A expenses (1)

 

 

(16,910)

 

 

(16,800)

Property operating expenses (excl. depreciation and amortization)

 

 

(4,090)

 

 

(4,040)

Depreciation and amortization on real estate assets

 

 

(6,175)

 

 

(6,150)

Interest expense

 

 

(8,635)

 

 

(8,535)

JV income

 

 

470

 

 

480

Other expenses

 

 

(270)

 

 

(270)

Other interest income

 

 

35

 

 

40

Net unrealized gain on investments (2)

 

 

34,600

 

 

36,600

Net income

 

 

43,905

 

 

46,410

Net income attributable to preferred stockholders (3)

 

 

(20,495)

 

 

(20,485)

Net income attributable to common stockholders

 

 

23,410

 

 

25,925

Add: stock dividends

 

 

8,500

 

 

8,500

Add: stock-based compensation

 

 

2,155

 

 

2,150

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

 

 

6,485

 

 

6,455

Add: other expenses (5)

 

 

270

 

 

270

Adjusted earnings

 

$

40,820

 

$

43,300

Earnings per share – diluted

 

$

1.08

 

$

1.19

Adjusted earnings per share – diluted

 

$

1.88

 

$

2.00

Average shares outstanding – diluted

 

 

21,700,000

 

 

21,700,000

1)

Includes $8.3 million (low and high) of fees to Manager for the year ending December 31, 2019.

2)

Excludes $0.3 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 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 $0.3 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 year ended December 31, 2019.

5)

Other expenses consist of professional fees incurred with respect to ongoing discussions and negotiations related to our Management Agreement.

 

Full-Year Key Assumptions:

 

·

Closings of approximately $101 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) and new development property investments;

·

Fundings of approximately $185 million to $195 million on the Company’s closed 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 approximately $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 $1.08 and $1.19 per share from the previously estimated range of $0.93 to $1.34 per share, and adjusted earnings is expected to be between $1.88 and $2.00 per share from the previously estimated range of $1.72 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 $34.6 million to $36.6 million of fair value appreciation in 2019, the Company recognized $8.8 million during the first quarter, $12.0 million in the second

 

Third Quarter 2019

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5

 

quarter, $8.0 million in the third quarter, and expects $5.8 million to $7.8 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.

 

 

 

Third 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

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2019

 

2019

 

2019

 

2018

 

2018

Operating Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, rental-related income and other revenues

 

$

12,249

 

$

10,832

 

$

9,884

 

$

9,666

 

$

9,091

JV income

 

 

165

 

 

85

 

 

156

 

 

58

 

 

440

Total revenues and JV income

 

 

12,414

 

 

10,917

 

 

10,040

 

 

9,724

 

 

9,531

General & administrative expenses

 

 

(4,268)

 

 

(4,442)

 

 

(3,765)

 

 

(4,375)

 

 

(3,599)

Property operating expenses of real estate owned

 

 

(989)

 

 

(786)

 

 

(762)

 

 

(508)

 

 

(473)

Depreciation and amortization of real estate owned

 

 

(1,372)

 

 

(1,090)

 

 

(1,029)

 

 

(982)

 

 

(854)

Other expenses

 

 

(268)

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Interest expense

 

 

(2,546)

 

 

(1,776)

 

 

(1,213)

 

 

(634)

 

 

(467)

Subtotal

 

 

2,971

 

 

2,823

 

 

3,271

 

 

3,225

 

 

4,138

Realized gain on investments

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

619

Net unrealized gain on investments

 

 

7,974

 

 

12,043

 

 

8,830

 

 

18,942

 

 

11,060

Other interest income

 

 

 9

 

 

 8

 

 

13

 

 

84

 

 

147

Net income

 

 

10,954

 

 

14,874

 

 

12,114

 

 

22,251

 

 

15,964

Net income attributable to preferred stockholders

 

 

(5,157)

 

 

(5,094)

 

 

(5,032)

 

 

(5,049)

 

 

(4,790)

Net income attributable to common stockholders

 

$

5,797

 

$

9,780

 

$

7,082

 

$

17,202

 

$

11,174

Plus: stock dividends to preferred stockholders

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

Plus: stock-based compensation

 

 

549

 

 

719

 

 

328

 

 

321

 

 

385

Plus: depreciation and amortization on real estate assets

 

 

1,372

 

 

1,090

 

 

1,029

 

 

982

 

 

854

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

82

 

 

82

 

 

56

 

 

 -

 

 

 -

Plus: other expenses

 

 

268

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Adjusted Earnings

 

$

10,193

 

$

13,796

 

$

10,620

 

$

20,630

 

$

14,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to common stockholders

 

$

0.26

 

$

0.46

 

$

0.35

 

$

0.87

 

$

0.58

Diluted earnings per share attributable to common stockholders

 

$

0.26

 

$

0.46

 

$

0.35

 

$

0.87

 

$

0.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings per share attributable to common stockholders – diluted

 

$

0.46

 

$

0.65

 

$

0.52

 

$

1.04

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

22,019,875

 

 

21,185,484

 

 

20,297,551

 

 

19,655,942

 

 

19,184,172

Diluted

 

 

22,233,594

 

 

21,387,462

 

 

20,455,116

 

 

19,816,194

 

 

19,459,751

Shares of common stock outstanding:

 

 

22,236,871

 

 

22,133,290

 

 

20,567,694

 

 

20,430,218

 

 

19,364,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,961

 

$

4,169

 

$

3,860

 

$

8,715

 

$

42,624

Self-Storage Investment Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development property investments at fair value

 

 

508,887

 

 

476,889

 

 

405,999

 

 

373,564

 

 

335,509

Bridge investments at fair value

 

 

 -

 

 

89,478

 

 

87,046

 

 

84,383

 

 

81,862

Operating property loans at fair value

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

2,440

Self-storage real estate owned

 

 

240,209

 

 

112,099

 

 

111,297

 

 

100,099

 

 

74,444

Accumulated depreciation on self-storage real estate owned

 

 

(7,387)

 

 

(6,016)

 

 

(4,926)

 

 

(3,897)

 

 

(2,915)

Self-storage real estate owned, net

 

 

232,822

 

 

106,083

 

 

106,371

 

 

96,202

 

 

71,529

Investment in and advances to self-storage real estate venture

 

 

11,027

 

 

12,416

 

 

12,360

 

 

14,155

 

 

14,401

Total assets

 

 

776,233

 

 

703,292

 

 

630,632

 

 

590,408

 

 

556,228

Gross assets

 

 

783,620

 

 

709,308

 

 

635,558

 

 

594,305

 

 

559,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured revolving credit facility

 

 

125,000

 

 

62,900

 

 

27,000

 

 

 -

 

 

 -

Term loans, net of unamortized costs

 

 

40,735

 

 

33,711

 

 

33,716

 

 

24,609

 

 

24,578

Total liabilities

 

 

186,816

 

 

116,437

 

 

77,831

 

 

42,544

 

 

40,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

589,417

 

 

586,855

 

 

552,801

 

 

547,864

 

 

515,539

 

 

Third Quarter 2019

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7

 

Jernigan Capital, Inc.

Consolidated Balance Sheets-Trailing Five Quarters

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2019

 

2019

 

2019

 

2018

 

2018

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,961

 

$

4,169

 

$

3,860

 

$

8,715

 

$

42,624

Self-Storage Investment Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development property investments at fair value

 

 

508,887

 

 

476,889

 

 

405,999

 

 

373,564

 

 

335,509

Bridge investments at fair value

 

 

 -

 

 

89,478

 

 

87,046

 

 

84,383

 

 

81,862

Operating property loans at fair value

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

2,440

Self-storage real estate owned, net

 

 

232,822

 

 

106,083

 

 

106,371

 

 

96,202

 

 

71,529

Investment in and advances to self-storage real estate venture

 

 

11,027

 

 

12,416

 

 

12,360

 

 

14,155

 

 

14,401

Other loans, at cost

 

 

4,417

 

 

4,576

 

 

5,025

 

 

4,835

 

 

4,818

Deferred financing costs

 

 

4,090

 

 

4,327

 

 

4,404

 

 

4,619

 

 

1,503

Prepaid expenses and other assets

 

 

7,813

 

 

5,129

 

 

5,348

 

 

3,702

 

 

1,327

Fixed assets, net

 

 

216

 

 

225

 

 

219

 

 

233

 

 

215

Total assets

 

$

776,233

 

$

703,292

 

$

630,632

 

$

590,408

 

$

556,228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured revolving credit facility

 

$

125,000

 

$

62,900

 

$

27,000

 

$

 -

 

$

 -

Term loans, net of unamortized costs

 

 

40,735

 

 

33,711

 

 

33,716

 

 

24,609

 

 

24,578

Due to Manager

 

 

2,749

 

 

2,453

 

 

2,267

 

 

3,334

 

 

2,309

Accounts payable, accrued expenses and other liabilities

 

 

5,392

 

 

4,526

 

 

2,612

 

 

2,402

 

 

2,235

Dividends payable

 

 

12,940

 

 

12,847

 

 

12,236

 

 

12,199

 

 

11,567

Total liabilities

 

$

186,816

 

$

116,437

 

$

77,831

 

$

42,544

 

$

40,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A Cumulative preferred stock

 

$

128,512

 

$

126,387

 

$

124,262

 

$

122,137

 

$

122,137

Series B Cumulative preferred stock

 

 

37,298

 

 

37,298

 

 

37,298

 

 

37,401

 

 

37,425

Common stock

 

 

222

 

 

221

 

 

205

 

 

204

 

 

193

Additional paid-in capital

 

 

422,240

 

 

419,760

 

 

389,431

 

 

386,394

 

 

364,108

Retained earnings (accumulated deficit)

 

 

1,645

 

 

3,630

 

 

1,605

 

 

1,728

 

 

(8,324)

Accumulated other comprehensive income (loss)

 

 

(500)

 

 

(441)

 

 

 -

 

 

 -

 

 

 -

Total equity

 

 

589,417

 

 

586,855

 

 

552,801

 

 

547,864

 

 

515,539

Total liabilities and equity

 

$

776,233

 

$

703,292

 

$

630,632

 

$

590,408

 

$

556,228

 

 

 

 

Third Quarter 2019

Picture 7

 

8

 

Jernigan Capital, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

 

 

Interest income from investments

 

$

10,216

 

$

8,086

 

$

27,578

 

$

19,051

Rental and other property-related income from real estate owned

 

 

1,988

 

 

970

 

 

5,075

 

 

2,398

Other revenues

 

 

45

 

 

35

 

 

312

 

 

99

Total revenues

 

 

12,249

 

 

9,091

 

 

32,965

 

 

21,548

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

2,137

 

 

1,727

 

 

6,273

 

 

5,579

Fees to Manager

 

 

2,131

 

 

1,872

 

 

6,203

 

 

4,758

Property operating expenses of real estate owned

 

 

989

 

 

473

 

 

2,538

 

 

1,204

Depreciation and amortization of real estate owned

 

 

1,372

 

 

854

 

 

3,491

 

 

2,443

Other expenses

 

 

268

 

 

 -

 

 

268

 

 

290

Total costs and expenses

 

 

6,897

 

 

4,926

 

 

18,773

 

 

14,274

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

5,352

 

 

4,165

 

 

14,192

 

 

7,274

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings from unconsolidated real estate venture

 

 

165

 

 

440

 

 

407

 

 

1,425

Realized gain on investments

 

 

 -

 

 

619

 

 

 -

 

 

619

Net unrealized gain on investments

 

 

7,974

 

 

11,060

 

 

28,847

 

 

24,003

Interest expense

 

 

(2,546)

 

 

(467)

 

 

(5,535)

 

 

(1,521)

Other interest income

 

 

 9

 

 

147

 

 

30

 

 

315

Total other income

 

 

5,602

 

 

11,799

 

 

23,749

 

 

24,841

Net income

 

 

10,954

 

 

15,964

 

 

37,941

 

 

32,115

Net income attributable to preferred stockholders

 

 

(5,157)

 

 

(4,790)

 

 

(15,283)

 

 

(12,965)

Net income attributable to common stockholders

 

$

5,797

 

$

11,174

 

$

22,658

 

$

19,150

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to common stockholders

 

$

0.26

 

$

0.58

 

$

1.06

 

$

1.17

Diluted earnings per share attributable to common stockholders

 

$

0.26

 

$

0.57

 

$

1.06

 

$

1.16

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.35

 

$

0.35

 

$

1.05

 

$

1.05

 

 

Third 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

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2019

 

2019

 

2019

 

2018

 

2018

Net income attributable to common stockholders

 

$

5,797

 

$

9,780

 

$

7,082

 

$

17,202

 

$

11,174

Plus: stock dividends to preferred stockholders

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

Plus: stock-based compensation

 

 

549

 

 

719

 

 

328

 

 

321

 

 

385

Plus: depreciation and amortization on real estate assets

 

 

1,372

 

 

1,090

 

 

1,029

 

 

982

 

 

854

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

82

 

 

82

 

 

56

 

 

 -

 

 

 -

Plus: other expenses

 

 

268

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Adjusted Earnings

 

$

10,193

 

$

13,796

 

$

10,620

 

$

20,630

 

$

14,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings per share attributable to common stockholders – diluted

 

$

0.46

 

$

0.65

 

$

0.52

 

$

1.04

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding – diluted

 

 

22,233,594

 

 

21,387,462

 

 

20,455,116

 

 

19,816,194

 

 

19,459,751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

September 30, 2019

 

September 30, 2018

Net income attributable to common stockholders

 

$

22,658

 

$

19,150

Plus: stock dividends to preferred stockholders

 

 

6,375

 

 

6,375

Plus: stock-based compensation

 

 

1,596

 

 

1,507

Plus: depreciation and amortization on real estate assets

 

 

3,491

 

 

2,443

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

219

 

 

 -

Plus: other expenses

 

 

268

 

 

290

Adjusted Earnings

 

$

34,607

 

$

29,765

 

 

 

 

 

 

 

Adjusted Earnings per share attributable to common stockholders – diluted

 

$

1.62

 

$

1.80

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding – diluted

 

 

21,365,239

 

 

16,540,367

 

 

 

Third Quarter 2019

Picture 7

 

10

 

Jernigan Capital, Inc.

Full-Year 2019 Guidance

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ending

 

 

December 31, 2019

 

 

Low

 

High

Interest income from investments

 

$

36,405

 

$

36,505

Rental revenue from real estate owned

 

 

8,125

 

 

8,225

Other income

 

 

350

 

 

355

Total revenues

 

$

44,880

 

$

45,085

G&A expenses (1)

 

 

(16,910)

 

 

(16,800)

Property operating expenses (excl. depreciation and amortization)

 

 

(4,090)

 

 

(4,040)

Depreciation and amortization on real estate assets

 

 

(6,175)

 

 

(6,150)

Interest expense

 

 

(8,635)

 

 

(8,535)

JV income

 

 

470

 

 

480

Other expenses

 

 

(270)

 

 

(270)

Other interest income

 

 

35

 

 

40

Net unrealized gain on investments (2)

 

 

34,600

 

 

36,600

Net income

 

 

43,905

 

 

46,410

Net income attributable to preferred stockholders (3)

 

 

(20,495)

 

 

(20,485)

Net income attributable to common stockholders

 

 

23,410

 

 

25,925

Add: stock dividends

 

 

8,500

 

 

8,500

Add: stock-based compensation

 

 

2,155

 

 

2,150

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

 

 

6,485

 

 

6,455

Add: other expenses (5)

 

 

270

 

 

270

Adjusted earnings

 

$

40,820

 

$

43,300

Earnings per share – diluted

 

$

1.08

 

$

1.19

Adjusted earnings per share – diluted

 

$

1.88

 

$

2.00

Average shares outstanding – diluted

 

 

21,700,000

 

 

21,700,000

 

6)

Includes $8.3 million (low and high) of fees to Manager for the year ending December 31, 2019.

7)

Excludes $0.3 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 year ended December 31, 2019.

8)

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.

9)

Includes $0.3 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 year ended December 31, 2019.

10)

Other expenses consist of professional fees incurred with respect to ongoing discussions and negotiations related to our Management Agreement.

 

Full-Year Key Assumptions:

 

·

Closings of approximately $101 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) and new development property investments;

·

Fundings of approximately $185 million to $195 million on the Company’s closed 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 approximately $160 million.

 

Of the estimated $34.6 million to $36.6 million of fair value appreciation in 2019, the Company recognized $8.8 million during the first quarter, $12.0 million in the second quarter, $8.0 million in the third quarter, and expects $5.8 million to $7.8 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.

 

Third Quarter 2019

Picture 7

 

11

 

Jernigan Capital, Inc.

Schedule of Owned Properties

As of September  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

 

$

12,049

 

93,965

 

42

 
86.9

%

Jacksonville 1
1939 East West Pkwy

 

8/12/2016

 

1/10/2018

 

 

8,687

 

59,848

 

39

 
90.0

%

Atlanta 2
340 Franklin Gateway SE

 

5/24/2016

 

2/2/2018

 

 

8,766

 

66,187

 

41

 
84.3

%

Atlanta 1
5110 McGinnis Ferry Rd

 

5/25/2016

 

2/2/2018

 

 

10,467

 

71,718

 

41

 
90.6

%

Pittsburgh
6400 Hamilton Ave

 

5/11/2017

 

2/20/2018

 

 

8,058

 

47,486

 

30

 
45.1

%

Charlotte 1
9323 Wright Hill Rd

 

8/18/2016

 

8/31/2018

 

 

10,525

 

86,750

 

38

 
65.3

%

New York City 1
1775 5th Ave

 

9/29/2017

 

12/21/2018

 

 

20,414

 

105,272

 

25

 
76.5

%

New Haven
453 Washington Ave

 

12/16/2016

 

3/8/2019

 

 

9,511

 

64,225

 

34

 
77.8

%

Miami
212 NE 26th St

 

(4)

 

7/2/2019

 

 

19,710

 

71,953

 

(4)

 

(4)

 

Jacksonville 2
45 Jefferson Rd

 

3/27/2018

 

8/16/2019

 

 

9,491

 

70,255

 

19

 
65.8

%

 

 

 

 

 

 

$

117,678

 

737,659

 

34(5)

 
76.8

%(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Miami 4
1103 SW 3rd Ave

 

10/9/2016

 

9/17/2019

 

 

 -

 

74,685

 

37

 
90.6

%

Miami 5
4001 NW 77th Ave

 

8/13/2018

 

9/17/2019

 

 

 -

 

77,075

 

14

 
59.4

%

Miami 6
590 NW 137th Ave

 

8/12/2016

 

9/17/2019

 

 

 -

 

76,765

 

39

 
85.2

%

Miami 7
18460 Pines Blvd

 

3/26/2018

 

9/17/2019

 

 

 -

 

86,450

 

19

 
64.5

%

Miami 8
2434 SW 28th Lane

 

12/12/2016

 

9/17/2019

 

 

 -

 

51,923

 

35

 
93.7

%

 

 

 

 

 

 

$

89,616

 

366,898

 

28(5)

 
77.2

%(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Owned Properties

 

 

 

$

207,294

 

1,104,557

 

32(5)

 
76.9

%(5)

(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 October  27, 2019.

(4)

As of September 30, 2019, this facility has not been placed into service.

(5)

Average weighted based on NRSF.

Picture 5

 

 

Third Quarter 2019

Picture 7

 

12

 

Jernigan Capital, Inc.

Schedule of Completed Projects

As of September 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

 

$

9,146

 

81,489

 

10/9/2016

 

37

 
75.2

%

10/27/2015

 

Austin
251 North A W Grimes Blvd

 

 

8,658

 

 

8,136

 

 

522

 

 

8,040

 

77,234

 

3/16/2017

 

31

 
89.2

%

8/14/2015

 

Raleigh
1515 Sunrise Ave

 

 

8,792

 

 

8,789

 

 

 3

 

 

8,640

 

60,171

 

3/8/2018

 

20

 
68.0

%

1/31/2017

 

Atlanta 4
4676 S Atlanta Rd

 

 

13,678

 

 

13,497

 

 

181

 

 

16,857

 

103,776

 

7/12/2018

 

16

 
43.1

%

2/24/2017

 

Orlando 3
12709 E Colonial Dr

 

 

8,056

 

 

7,629

 

 

427

 

 

9,473

 

69,645

 

7/26/2018

 

15

 
43.8

%

4/20/2017

 

Denver 2
3110 S Wadsworth Blvd

 

 

11,164

 

 

10,995

 

 

169

 

 

12,632

 

74,307

 

7/31/2018

 

15

 
47.6

%

6/29/2017

 

Boston 1 (4)
329 Boston Post Rd E

 

 

 -

 

 

 -

 

 

 -

 

 

3,232

 

90,553

 

8/8/2018

 

15

 
42.9

%

4/14/2017

 

Louisville 1
2801 N Hurstbourne Pkwy

 

 

8,523

 

 

7,422

 

 

1,101

 

 

9,224

 

65,786

 

8/15/2018

 

14

 
44.8

%

9/20/2016

 

Charlotte 2
1010 E 10th St

 

 

12,888

 

 

12,413

 

 

475

 

 

13,600

 

75,760

 

8/30/2018

 

14

 
49.0

%

9/28/2017

 

Louisville 2
3415 Bardstown Rd

 

 

9,940

 

 

9,311

 

 

629

 

 

11,527

 

76,603

 

8/31/2018

 

14

 
41.3

%

6/12/2017

 

Tampa 4
3201 32nd Ave S

 

 

10,266

 

 

9,379

 

 

887

 

 

12,654

 

72,765

 

10/9/2018

 

13

 
46.2

%

5/2/2017

 

Atlanta 6
2033 Monroe Dr

 

 

12,543

 

 

11,818

 

 

725

 

 

14,367

 

80,885

 

10/15/2018

 

12

 
31.1

%

7/27/2017

 

Jacksonville 3
2004 Edison Ave

 

 

8,096

 

 

7,520

 

 

576

 

 

9,538

 

68,100

 

11/6/2018

 

12

 
42.2

%

6/19/2017

 

Baltimore 1 (5)
1835 Washington Blvd

 

 

10,775

 

 

10,453

 

 

751

 

 

12,159

 

83,635

 

11/20/2018

 

11

 
32.1

%

5/19/2017

 

Tampa 3
2460 S Falkenburg Rd

 

 

9,224

 

 

8,089

 

 

1,135

 

 

9,906

 

70,574

 

11/29/2018

 

11

 
45.8

%

6/28/2017

 

Knoxville
130 Jack Dance St

 

 

9,115

 

 

8,463

 

 

652

 

 

10,316

 

72,490

 

11/30/2018

 

11

 
39.8

%

2/24/2017

 

New Orleans
2705 Severn Ave

 

 

12,549

 

 

11,668

 

 

881

 

 

13,927

 

86,545

 

12/21/2018

 

10

 
38.7

%

6/30/2017

 

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

 

 

27,982

 

 

28,267

 

 

1,160

 

 

29,877

 

40,951

 

12/28/2018

 

10

 
28.0

%

8/30/2017

 

Orlando 4
9001 Eastmar Commons

 

 

9,037

 

 

7,967

 

 

1,070

 

 

10,164

 

76,340

 

1/16/2019

 

9

 
45.6

%

2/8/2018

 

Minneapolis 2
3216 Winnetka Ave N

 

 

10,543

 

 

9,527

 

 

1,016

 

 

11,159

 

83,648

 

3/14/2019

 

7

 
31.1

%

12/1/2017

 

Boston 2
10 Hampshire Rd

 

 

8,771

 

 

7,737

 

 

1,034

 

 

9,602

 

76,181

 

3/19/2019

 

7

 
32.7

%

2/27/2017

 

Atlanta 5
56 Peachtree Valley Rd NE

 

 

17,492

 

 

17,492

 

 

 -

 

 

19,880

 

87,160

 

4/8/2019

 

7

 
17.3

%

3/30/2018

 

Philadelphia (5)(6)
550 Allendale Rd

 

 

14,338

 

 

11,429

 

 

3,264

 

 

11,688

 

69,930

 

4/25/2019

 

6

 
22.7

%

3/1/2017

 

Fort Lauderdale
5601 NE 14th Ave

 

 

9,952

 

 

9,191

 

 

761

 

 

12,974

 

80,559

 

5/2/2019

 

6

 
41.0

%

5/2/2017

 

Tampa 2
9125 Ulmerton Rd

 

 

8,091

 

 

7,513

 

 

578

 

 

8,790

 

70,967

 

5/9/2019

 

6

 
37.0

%

3/1/2017

 

Houston
1050 Brittmoore Rd

 

 

14,825

 

 

14,825

 

 

 -

 

 

17,820

 

131,345

 

5/21/2019

 

5

 
11.7

%

4/20/2017

 

Denver 1
6206 W Alameda Ave

 

 

9,806

 

 

9,117

 

 

689

 

 

10,179

 

59,524

 

6/28/2019

 

4

 
24.6

%

1/18/2017

 

Atlanta 3 
1484 Northside Dr NW

 

 

14,115

 

 

12,433

 

 

1,682

 

 

14,921

 

93,283

 

8/6/2019

 

3

 
12.0

%

11/21/2017

 

Minneapolis 1
2109 University Ave W

 

 

12,674

 

 

9,767

 

 

2,907

 

 

11,289

 

88,348

 

9/3/2019

 

2

 
4.6

%

Total Completed Development Investments

 

$
319,543

 

$
298,495

 

$
23,277

 

$
353,581

 

2,268,554

 

 

 

12(7)

 
37.9

%(7)

(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 October  27, 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.

(7)

Average weighted based on NRSF.

 

Third Quarter 2019

Picture 7

 

13

 

Schedule of Projects in Progress

As of September 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)

9/14/2017

 

Los Angeles 1
959 W Hyde Park Blvd

 

 

28,750

 

 

9,470

 

 

19,280

 

 

9,722

 

120,038

 

Q2 2020

 

Q1 2021

9/14/2017

 

Miami 1
4250 SW 8th St

 

 

14,657

 

 

10,329

 

 

4,328

 

 

10,541

 

69,175

 

Q2 2018

 

Q1 2020

10/12/2017

 

Miami 2 (4)
880 W Prospect Rd

 

 

9,459

 

 

1,432

 

 

8,097

 

 

1,245

 

58,000

 

Q1 2020

 

Q4 2020

10/30/2017

 

New York City 3 (4)
5203 Kennedy Blvd

 

 

15,301

 

 

6,472

 

 

9,077

 

 

6,114

 

68,660

 

Q4 2017

 

Q4 2020

11/16/2017

 

Miami 3 (4)
120-132 NW 27th Ave

 

 

20,168

 

 

8,365

 

 

12,060

 

 

8,113

 

96,295

 

Q4 2018

 

Q2 2020

12/15/2017

 

New York City 4
6 Commerce Center Dr

 

 

10,591

 

 

4,887

 

 

5,704

 

 

5,350

 

78,325

 

Q2 2018

 

Q1 2020

12/27/2017

 

Boston 3
19 Coolidge Hill Rd

 

 

10,174

 

 

2,710

 

 

7,464

 

 

2,638

 

62,700

 

Q1 2020

 

Q1 2021

12/28/2017

 

New York City 5
375 River St

 

 

16,073

 

 

10,718

 

 

5,355

 

 

12,065

 

90,700

 

Q4 2018

 

Q4 2019

4/6/2018

 

Minneapolis 3
101 American Blvd West

 

 

12,883

 

 

8,613

 

 

4,270

 

 

10,075

 

87,084

 

Q3 2018

 

Q4 2019

5/1/2018

 

Miami 9 (4)
10651 W Okeechobee Rd

 

 

12,421

 

 

3,423

 

 

9,118

 

 

3,314

 

70,538

 

Q1 2020

 

Q4 2020

5/15/2018

 

Atlanta 7
2915 Webb Rd

 

 

9,418

 

 

4,515

 

 

4,903

 

 

5,195

 

76,519

 

Q3 2018

 

Q1 2020

5/23/2018

 

Kansas City
510 Southwest Blvd

 

 

9,968

 

 

6,376

 

 

3,592

 

 

7,516

 

76,751

 

Q3 2018

 

Q4 2019

6/7/2018

 

Orlando 5
7212 W Sand Lake Rd

 

 

12,969

 

 

8,190

 

 

4,779

 

 

9,613

 

75,918

 

Q4 2018

 

Q4 2019

6/12/2018

 

Los Angeles 2 (4)
7855 Haskell Ave

 

 

9,298

 

 

4,839

 

 

4,874

 

 

4,883

 

116,022

 

Q4 2019

 

Q1 2021

11/16/2018

 

Baltimore 2
8179 Ritchie Hwy

 

 

9,247

 

 

715

 

 

8,532

 

 

672

 

61,750

 

Q2 2019

 

Q4 2020

3/1/2019

 

New York City 6
435 Tompkins Ave

 

 

18,796

 

 

3,111

 

 

15,685

 

 

3,088

 

76,250

 

Q4 2019

 

Q4 2020

3/15/2019

 

Stamford (3)(4)
370 West Main St

 

 

2,904

 

 

3,014

 

 

 -

 

 

4,990

 

38,650

 

Q2 2019

 

Q4 2019

4/18/2019

 

New York City 7 (4)
14 Merrick Rd

 

 

23,462

 

 

6,309

 

 

17,232

 

 

6,093

 

95,331

 

Q3 2019

 

Q3 2020

5/8/2019

 

New York City 8 (4)
74 Bogart St

 

 

21,000

 

 

21,580

 

 

 -

 

 

22,126

 

193,763

 

Q1 2020

 

Q3 2021

7/11/2019

 

New York City 9 (4)
74-16 Grand Ave

 

 

13,095

 

 

13,298

 

 

 -

 

 

13,280

 

105,950

 

Q1 2020

 

Q2 2021

8/21/2019

 

New York City 10 (4)
1401 4th Ave

 

 

8,674

 

 

8,741

 

 

 -

 

 

8,673

 

76,775

 

Q3 2019

 

Q4 2020

Total Development Investments in Progress

 

$

289,308

 

$

147,107

 

$

144,350

 

$

155,306

 

1,795,194

 

 

 

 

(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 September  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)

This facility received a temporary C/O or C/O subsequent to September  30, 2019.

(4)

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.

 

 

Third Quarter 2019

Picture 7

 

14

 

Schedule of Heitman JV Owned Properties and Development Projects Completed

As of September  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

 

27

 
85.0

%

Atlanta 2
11220 Medlock Bridge Rd

 

9/14/2017

 

1/28/2019

 

 

10,079

 

70,139

 

25

 
71.4

%

Denver
2255 E 104th Ave

 

12/14/2017

 

1/28/2019

 

 

13,899

 

85,500

 

22

 
62.2

%

Atlanta 1
1801 Savoy Dr

 

4/12/2018

 

1/28/2019

 

 

11,770

 

71,147

 

19

 
55.8

%

Total Owned Properties

 

 

 

$

48,312

 

307,407

 

23(4)

 
68.8

%(4)

(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 October  27, 2019.

(4)

Average weighted based on NRSF.

 

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

 

$

9,072

 

$

127

 

$

10,348

 

70,935

 

8/23/2017

 

26

 
67.3

%

4/15/2016

 

Washington DC (4)
1325 Kenilworth Ave NE

 

 

 -

 

 

 -

 

 

 -

 

 

3,043

 

90,295

 

9/25/2017

 

25

 
72.5

%

5/14/2015

 

Miami 1
490 NW 36th St

 

 

13,867

 

 

12,819

 

 

1,048

 

 

15,716

 

75,770

 

2/23/2018

 

20

 
68.0

%

12/22/2016

 

Raleigh
7710 Alexander Town Blvd

 

 

8,877

 

 

8,856

 

 

21

 

 

9,539

 

64,108

 

6/8/2018

 

17

 
56.8

%

9/25/2015

 

Fort Lauderdale
812 NW 1st St

 

 

13,230

 

 

12,899

 

 

331

 

 

16,969

 

87,384

 

7/26/2018

 

15

 
38.4

%

5/14/2015

 

Miami 2
1100 NE 79th St

 

 

14,849

 

 

14,519

 

 

330

 

 

15,864

 

73,890

 

10/30/2018

 

12

 
62.3

%

7/21/2016

 

New Jersey
6 Central Ave

 

 

7,828

 

 

7,085

 

 

743

 

 

8,593

 

59,010

 

1/24/2019

 

9

 
45.4

%

Total Completed Development Investments

 

$

67,850

 

$

65,250

 

$

2,600

 

$

80,072

 

521,392

 

 

 

18(5)

 
59.0

%(5)

(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 October  27, 2019.

(4)

The SL1 Venture’s loan was repaid in full through a refinancing initiated by the SL1 Venture’s partner. This investment represents the SL1 Venture’s 49.9% Profits Interest which was retained during the transaction.

(5)

Average weighted based on NRSF.

 

 

 

Third Quarter 2019

Picture 7

 

15

 

Summary of Investments

As of September 30, 2019

 

Closed Investments by Geography:

 

Picture 2

 

*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

15

 

14

 

1

 

1,104,557

 

$

207,294

 

Development Property Investments

50

 

29

 

21

 

4,063,748

 

$

608,851

Joint Venture

 

 

 

 

 

 

 

 

 

 

 

Wholly Owned Assets

4

 

4

 

0

 

307,407

 

$

4,831

 

Development Property Investments

7

 

7

 

0

 

521,392

 

$

6,785

 

 

Third Quarter 2019

Picture 7

 

16

 

Capital Sources and Investment Uses 

As of September  30, 2019

(dollars in millions)

 

 

 

 

 

 

 

 

Estimated Capital to be Used in Investing Activities (1)

 

 

 

Contractual investment obligations:

 

 

 

Development property investments (2)

 

$

168

Total to Fund Investments

 

$

168

 

 

 

 

 

 

 

 

Estimated Sources of Capital

 

 

 

Cash and cash equivalents as of September 30, 2019

 

$

 7

Remaining credit facility capacity (3)

 

 

110

Remaining capital needs

 

 

51

Total Sources

 

$

168

(1)

Does not include financing spend or operating cash flow.

(2)

Includes non-cash interest reserves of approximately $36 million.

(3)

Assumes increase in the borrowing base availability under the Credit Facility to the full $235 million prior to any accordion amounts. As of September  30, 2019,  the Company had $73.5 million available under the Credit Facility after considering the $125 million outstanding and $198.5 million of total availability for borrowing under the Credit Facility.

 

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)

·

Potential sales of facilities underlying current development investments to third parties 

·

Common Stock issuances 

·

Potential exercise of $165 million accordion feature of Credit Facility

 

 

 

Timing of Funding $168 million of Investments (1)

 

 

Picture 1

 

(1)

Includes non-cash interest reserves of approximately $36 million.

 

Third Quarter 2019

Picture 7

 

17

 

Capital Structure

As of September  30, 2019

(dollars in millions)

 

 

 

 

 

 

 

 

Credit Facility Outstanding

 

$

125

Term Loans

 

 

41

Series A Preferred Stock

 

 

131

Series B Preferred Stock

 

 

39

Common Stock

 

 

428

Total Capital

 

$

764

 

 

 

Picture 4

 

 

 

Third Quarter 2019

Picture 7

 

18

 

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

 

 

 

Mark O. Decker

 

James D. Dondero

Director

 

Director

 

 

 

Rebecca Owen

 

Howard A. Silver

Director

 

Director

 

 

 

Harry J. Thie

 

 

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.

 

 

Third Quarter 2019

Picture 7

 

19