0001622353-20-000009.txt : 20200507 0001622353-20-000009.hdr.sgml : 20200507 20200507161502 ACCESSION NUMBER: 0001622353-20-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20200507 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200507 DATE AS OF CHANGE: 20200507 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Jernigan Capital, Inc. CENTRAL INDEX KEY: 0001622353 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 471978772 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36892 FILM NUMBER: 20856553 BUSINESS ADDRESS: STREET 1: 6410 POPLAR AVE. STREET 2: SUITE 650 CITY: MEMPHIS STATE: TN ZIP: 38119 BUSINESS PHONE: 901.567.9522 MAIL ADDRESS: STREET 1: 6410 POPLAR AVE. STREET 2: SUITE 650 CITY: MEMPHIS STATE: TN ZIP: 38119 8-K 1 jcap-20200507x8k.htm 8-K jcap_Current_Folio_8K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549


FORM 8‑K


CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 7, 2020

Jernigan Capital, Inc.

(Exact Name of Registrant as Specified in its Charter)

Maryland

001‑36892

47‑1978772

(State or Other Jurisdiction
of Incorporation)

(Commission File
Number)

(IRS Employer
Identification No.)

 

6410 Poplar Avenue, Suite 650

38119

(Address of Principal Executive Offices)

(Zip Code)

 

(901) 567‑9510

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

 

Securities Registered pursuant to Section 12(b) of the Act:

 

 

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

 

7.00% Series B cumulative redeemable perpetual preferred stock, $0.01 par value per share

JCAP

 

 

JCAP PR B

New York Stock Exchange

 

 

New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).

 

Emerging growth company ☒

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

 

 

 

Item 2.02.            Results of Operations and Financial Condition.

 

On May 7, 2020, Jernigan Capital, Inc. (“the Company”) issued a press release announcing its financial position as of March 31, 2020, results of operations for the three months ended March 31, 2020, and other related information. Also on May 7, 2020, the Company made available on the investor relations page of the Company’s website at www.jernigancapital.com certain supplemental information concerning the Company’s financial results and operations for the three months ended March  31, 2020. Copies of such press release and supplemental information are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8‑K and are incorporated herein by reference.

 

In accordance with General Instructions B.2 and B.6 of Form 8‑K, the information included in this Current Report on Form 8‑K, including Exhibit 99.1 and Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

 

Item 7.01.            Regulation FD Disclosure.

 

The disclosure contained in Item 2.02 is incorporated herein by reference.

 

Item 9.01             Financial Statements and Exhibits.

 

(d)   Exhibits.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: May 7, 2020

 

 

 

 

Jernigan Capital, Inc.

 

 

 

 

 

By:

/s/ John A. Good

 

 

Name:

John A. Good

 

 

Title:

Chief Executive Officer

 

 

EX-99.1 2 jcap-20200507ex991048b1f.htm EXHIBIT 99.1 jcap_Ex99_1

Exhibit 99.1

 

Picture 7

 

Jernigan Capital Reports First Quarter Results

 

MEMPHIS, Tennessee, May 7, 2020 / 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 March 31, 2020.

 

First Quarter Highlights include:

 

§

$(2.53) loss per share, including $(0.46) related to change in fair value of investments and $(1.84) related to internalization expenses, goodwill impairment and the final payment of management fees to JCAP Advisors LLC for the period prior to internalization.  

 

§

Adjusted loss per share of $(0.42), including $(0.46) related to change in fair value of investments.

 

§

Enhanced shareholder/management alignment of interests and reduced run-rate G&A expense by approximately 40% with the internalization of JCAP Advisors LLC, the Company’s external advisor, on February 20, 2020.

 

§

Enhanced liquidity position by increasing size of revolving credit facility from $235 million to $375 million, reducing interest rate, improving covenants and attracting new banks.

 

§

Increased the number of wholly owned self-storage facilities on its balance sheet or in its SL1 Joint Venture from 20 to 29 through developer buyouts of nine development property investments including the Fort Lauderdale, Boston 2, Atlanta 4, Atlanta 6, Atlanta 5, Atlanta 3, Charlotte 2, Knoxville, and Louisville 1 development property investments.

 

§

Commenced leasing of Generation V self-storage facilities underlying two development property investments in which the Company has an aggregate committed investment of $25.5 million, 49.9% profits interests and ROFRs.

 

 

Subsequent Events include:

 

§

Acquired 100% of the Class A membership units of the LLCs that own the Raleigh and Jacksonville 3 development property investments. With these acquisitions, the Company now wholly owns 31 facilities on its balance sheet or in its SL1 Joint Venture, representing approximately 41% of its total portfolio by net rentable square feet.

 

§

Entered into a $100 million interest rate swap and a $100 million interest rate cap on the Company’s $375 million senior secured revolving line of credit, locking in a maximum one-month LIBOR of 0.43% on $200 million of debt capital through March 24, 2023. With these contracts in place, the Company has locked in a maximum cost of debt on $200 million of debt capital at approximately 3.1%, which it anticipates will decrease as investments underlying the borrowing base mature.  

 

“The year started very strongly for JCAP,” stated John Good, Chairman and Chief Executive Officer. “We accomplished a major goal set at the time of our IPO in March 2015 with the internalization of JCAP Advisors on February 20th in a transaction that we believe was very beneficial to shareholders and positioned the Company for future success through the alignment of interests and the right-sizing of corporate G&A. We improved the balance sheet by opportunistically issuing $15.4 million of common stock in the first few days of the year, and subsequently by upsizing our credit facility to $375 million and improving the pricing and covenants in the early days of the COVID-19 pandemic.  Between cash on the balance sheet, increased availability on the credit facility, reduced commitments and cost savings, we are confident that we will have sufficient liquidity to cover all our commitments for the foreseeable future.”

 

“We continued to effectively execute the Company’s business plan of consolidating ownership of the projects we finance by acquiring the developers’ interests in nine newly developed, state-of-the-art Generation V self-storage properties that we had previously financed. Our best-of-class portfolio of Generation V self-storage properties continued to lease-up well and increase rates, resulting in revenue exceeding the top end of our guidance range and net operating income exceeding expectations on our owned properties by 31%. Our facilities that we wholly owned on balance sheet as of March 31, 2020, excluding those placed in service during the quarter, gained 388 basis points of occupancy during the quarter.”

 

 

1

“While the start to 2020 was strong, we, like the rest of the world have been profoundly impacted by the COVID-19 pandemic,” continued Mr. Good. “Since the outbreak began, our priority has been and remains the health and safety of our teammates, our customers, our developer partners and the employees staffing our stores for our operating partners. We encouraged teammates to work from home beginning the week of March 16th and officially closed our corporate offices in Memphis on March 25th to promote social distancing. We experienced a seamless transition to our new remote working conditions and have continued to function very well with state-of-the-art technology. Our third-party operating partners continue to safely and effectively operate each of our facilities with initiatives in-place to promote social distancing and the well-being of the communities in which we operate. All of our stores have remained open throughout this pandemic and are actively fulfilling the needs of both new and existing customers. We are thankful to be in the self-storage sector, a business that reliably meets essential needs of customers during times of uncertainty and change.”

 

“We have been very proactive in making sure the Company is well positioned to not only withstand the impacts of the pandemic, but to prosper in any resulting environment,” continued Mr. Good. “Actions taken since the pandemic began include:

 

·

evaluating and suspending non-essential expenditures;

·

increasing the capacity of the credit facility, improving the terms and fixing the interest rate on $200 million of debt at a maximum of approximately 3.1%  through March 24, 2023;

·

increasing the frequency of communication with our third-party managers to interactively monitor operations and overall performance;

·

re-assessing five development projects for which either development or construction had not yet commenced and agreeing with developers to discontinue funding those projects; and

·

actively engaging with developer partners and increasing discussions with potential joint venture partners to take advantage of the pending acquisitions cycle.

 

These efforts have increased our cash position, bolstered liquidity and eliminated unnecessary costs in a time of uncertainty, while allowing for the continued execution of the business plan.”

 

“While we believe we are doing all the right things to address the dramatic effect of the pandemic on our lives and our business, we, like everyone else, have suffered what we believe to be a temporary loss of customers, operating momentum and asset value. Looking forward, it is too early to project the ultimate impact of the pandemic and resulting economic downturn on our operations. We are certain that core operations for the remainder of the year will be below original expectations and it will take longer to stabilize our properties in lease up. Accordingly, we have adjusted downward the fair values of our development property investments to take into account longer lease-up periods and lower short-term rental rates due to the COVID-19 pandemic occurring during a period of elevated supply and interrupting the 2020 leasing season, as well as the effect of a dramatic widening of credit spreads at the onset of the pandemic. The extent of the lingering impact to our operations and fair value will largely depend on the duration and magnitude of the pandemic and the eventual recovery. With this general uncertainty and lack of visibility, we are withdrawing our earnings per share and adjusted earnings per share guidance ranges for the full-year 2020, and we will reevaluate our guidance at such time as visibility improves and we can predict with better certainty our results of operations.”

 

“To be clear, our fair value write-down and withdrawal of guidance should in no respect be viewed as a loss of confidence in our portfolio or in the longer-term performance of self-storage properties. Many of our properties are in states that were among the earliest to relax “safer-at-home” orders, namely Colorado, Florida, Georgia, Minnesota, South Carolina and Texas. Notwithstanding the economic trauma and the far-reaching impact of the COVID-19 pandemic, the self-storage industry is equipped to perform better than most other sectors of commercial real estate because of its low capital expenditures, the multitude of demand drivers and the power of branding,” continued Mr. Good. “The pandemic will drive changes in peoples’ lives, and change drives storage demand. We are confident in our portfolio of newly developed self-storage facilities, our underlying business strategy, and the brands and management capabilities of our third-party managers.”

 

Financial Highlights 

 

Total revenues for the quarter ended March  31, 2020 were $11.7 million representing an increase of $1.8 million, or 18%, over total revenues for the quarter ended March 31, 2019.  Total interest income from investments for the three months ended March 31, 2020 was $7.8 million, a decrease of approximately $0.5 million, or 6%, from the three months ended March 31, 2019. The decrease is primarily attributable to a decrease in the principal amount of development loans and bridge loans outstanding as a result of our acquisitions of developer interests in 17 additional self-storage facilities. At the same time, rental revenue was $3.9 million for the three months ended March 31, 2020, an increase of $2.4 million, or 167%, over rental revenue of $1.5 million reported for the same period in 2019. This increase is the result of 17 acquisitions of our developer’s interests during 2019 and the three months ended March 31, 2020 coupled with increased property net operating income on existing real estate owned resulting from higher occupancy and rental rates.

 

Total general and administrative expenses, including fees to manager, for the three months ended March 31, 2020 were $4.0 million, an increase of $0.2 million, or 6%, from the three months ended March 31, 2019, primarily due to annual compensation increases, as well as the addition of two professional employees during the third quarter of 2019 who were hired for various functions rendered necessary

2

by our conversion to an equity REIT. However, on a linked quarterly basis (first quarter 2020 compared to fourth quarter 2019), total general and administrative expenses declined approximately 8%, from $4.3 million in the fourth quarter 2019 to $4.0 million in the first quarter 2020. Compensation and benefits included non-cash expense of stock-based compensation of $0.6 million and $0.3 million for the three months ended March 31, 2020 and 2019, respectively. The Company consummated the internalization on February 20, 2020, and incurred $1.2 million of management fees up to that date. Beginning with the second quarter 2020, the Company will no longer incur fees to manager.

 

The Company incurred a net unrealized loss on investments of $11.0 million for the three months ended March 31, 2020, compared to a net unrealized gain of $8.8 million for the comparable period in 2019. The loss, and decrease compared to prior year, is attributable to (1) a significant decrease in the number of investments carried at fair value due to a significant increase in the number of properties owned outright, (2) fewer facilities achieving substantial completion in the 2020 period on account of reduced construction/development activity and delays due to the pandemic, (3) a prolonged economic stabilization of properties underlying investments carried at fair value, including longer physical lease-up periods and lower rates, due to the COVID-19 pandemic and its occurrence during a period of elevated new supply, and (4) a significant widening of credit spreads near the end of the first quarter caused by the pandemic and the resulting dramatic and rapid economic downturn.

 

Internalization expenses were $37.8 million for the quarter ended March 31, 2020 and were comprised of $37.4 million of expenses for the settlement of the pre-existing contractual agreement with the Manager and $0.4 million of acquisition-related expenses, both of which related to the Internalization. The Internalization also resulted in the Company recording goodwill of $4.7 million in its Consolidated Balance Sheets as of the date of acquisition. Generally accepted accounting principles (“GAAP”) require that the Company evaluate goodwill for impairment annually unless a triggering event occurs prior to that date. The Company determined that triggering events had occurred as a result of the COVID-19 pandemic and analyzed the goodwill for impairment. The Company determined that as of the measurement date the carrying value of its single reporting unit exceeded the fair value, resulting in a goodwill impairment loss of $4.7 million.

 

Loss per share and adjusted loss per share for the quarter ended March 31, 2020 were $(2.53) and $(0.42), respectively. Net loss attributable to common stockholders for the quarter ended March 31, 2020 was $58.0 million, compared to $7.1 million net income attributable to common stockholders for the comparable quarter in 2019. The decrease is largely attributable to the expense of internalization of $37.8 million, the goodwill impairment of $4.7 million and the net unrealized loss on investments carried at fair value, all as previously discussed.  

 

Capital Markets, Capital Recycling & Liquidity Update

 

In January, the Company issued an aggregate $15.4 million of common stock under the Company’s at-the-market program at a weighted average share price of $19.07.

 

On March 26, 2020, the Company entered into an amended and restated senior secured revolving credit facility of up to $375 million with a syndicate of banks led by KeyBank National Association and BMO Harris Bank N.A. The $375 million credit facility, which has an accordion feature permitting expansion up to $750 million, subject to certain conditions including obtaining additional commitments from lenders, has a three-year term that expires March 24, 2023 and two one-year extension options.

 

·

Upsized to $375 million from $235 million

·

Credit spreads lowered by 15-25 basis points

·

Maturity extended by approximately 1 ¼ years to March 24, 2023, plus two one-year extensions

·

Financial covenant package updated to support the Company’s growth plan

·

Added three new banks including Truist Bank, Synovus Bank and IberiaBank

 

Borrowings under the credit facility are secured by three separate pools of collateral: one consisting of the Company’s development property investments, one consisting of non-stabilized self-storage properties wholly-owned by the Company, and the last consisting of stabilized self-storage properties wholly-owned by the Company. Advances under the credit agreement bear interest at rates between 210 and 300 basis points over 30-day LIBOR. These spreads are 15 to 25 basis points lower than the spreads under the previous credit facility, which were between 225 and 325 basis points. The Company’s weighted average spread based on its current borrowing base as of March 31, 2020 was 2.65%. 

 

On May 4, 2020 and May 6, 2020,  the Company entered into a $100 million interest rate swap and a $100 million interest rate cap on the Company’s senior secured line of credit, respectively, locking in a maximum one-month LIBOR of 0.43% on $200 million of outstanding credit facility through March 24, 2023 (the maturity date of the credit facility). With these contracts in place, the Company has locked in a maximum cost of debt on $200 million of debt capital at approximately 3.1%, which it expects to decline as the assets constituting the borrowing base mature.

 

3

In February, the Company’s only land loan was repaid for net proceeds to the Company of $3.8 million. The loan had been categorized on the Company’s consolidated balance sheet as part of other loans.

 

“We continue to monitor the effect of the pandemic on our operations and liquidity during these unprecedented times,” noted Kelly Luttrell, SVP and Chief Financial Officer. “With our upsized $375 million credit facility, ATM sales prior to the pandemic, and closed as well as potential capital recycling opportunities, we believe we are well positioned to fund our existing development commitments, opportunistically acquire developers’ interests and operate our core business as planned. Our contractual investment commitments in our development pipeline are now fully covered at conservative leverage levels for the foreseeable future, and we have the ability to continue to execute developer buy-outs opportunistically. As of the close of business on May 7, 2020, we have approximately $225 million drawn on the line with an additional $25 million of availability. We also have approximately $16 million of unrestricted cash on hand. By the end of the year, we expect borrowing base availability to be between $280 million and $310 million.”  

 

Dividends

 

On February 21, 2020 the Company declared cash and stock dividends on its Series A Preferred Stock. The cash dividend of $2.4 million was paid on April 15, 2020 to holders of record on April 1, 2020. A stock dividend of 2,125 shares of additional Series A Preferred Stock was issued on April 15, 2020 to holders of record on April 1, 2020 for an aggregate value of $2.1 million pursuant to the terms of the Stock Purchase Agreement.

On February, 21 2020, the Company declared a cash dividend on its Series B Preferred Stock. The cash dividend of $0.7 million was paid on April 15, 2020 to holders of record on April 1, 2020.

On February, 21 2020, the Company declared a dividend of $0.23 per common share. The dividend was paid on April 15, 2020 to common stockholders of record on April 1, 2020.

 

Suspending Full-Year 2020 Guidance

 

COVID-19 was characterized on March 11, 2020 by the World Health Organization as a pandemic. The extent to which the COVID-19 pandemic impacts our future operations, financial condition and financial results will depend on future developments, which are highly uncertain, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. With the uncertainty and lack of visibility with respect to economic recovery, the Company is withdrawing our earnings per share and adjusted earnings per share guidance ranges for the full-year 2020, and will revisit earnings guidance at such time as visibility improves and the Company can predict with better certainty our results of operations.

 

Refer to the Company’s First Quarter 2020 Supplemental Information Package for more information.

 

Conference Call and Webcast Information

 

The Company will host a webcast and conference call on Friday, May 8, 2020 at 12:00 p.m. Eastern Time to discuss the financial results and recent events. A webcast will be available on the Company’s website at investors.jernigancapital.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register and download and install any necessary audio software. The replay of the webcast will be available on the Company’s website for 90 days.

 

Supplemental financial and operating information for the quarter ended March  31, 2020 is available on the Company’s website under Financials – Quarterly Supplemental Information.

 

To Participate in the Telephone Conference Call:

 

Dial in at least 15 minutes prior to start time.

 

Domestic: 1-877-407-0792

International: 1-201-689-8263

 

Conference Call Replay:

 

Domestic: 1-844-512-2921

International: 1-412-317-6671

Passcode: 13694252

 

4

About Jernigan Capital, Inc.

 

Jernigan Capital is a New York Stock Exchange-listed real estate investment trust (NYSE: JCAP) that provides debt and equity capital to private developers, owners and operators of self-storage facilities with a view to eventual outright ownership of facilities the Company finances. Our mission is to maximize shareholder value by accumulating a multi-billion dollar investment portfolio consisting of the newest, most attractive and best located self-storage facilities in the United States through a talented and experienced team demonstrating the highest levels of integrity, dedication, excellence and community.

 

Forward-Looking Statements

 

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the duration, severity and impact of the COVID-19 pandemic and resulting economic downturn, fair value measurements, our ability to acquire our developers’ interests in additional properties, our management team’s views of the self-storage market generally, 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, and the terms and our rate of deployment of equity capital and our ability to increase the borrowing base and use the accordion feature of our credit facility. The ultimate occurrence of events and results referenced in these forward-looking statements is subject to known and unknown risks and uncertainties, many of which are beyond our control. These forward-looking statements are based upon the Company's present intentions and expectations, but the events and results referenced in these statements are not guaranteed to occur. The Company undertakes no duty or responsibility to publicly update or revise any forward-looking statement to reflect future events or circumstances or to reflect the occurrence of unexpected events. Investors should not place undue reliance upon forward-looking statements. For a discussion of these and other risks facing our business, see the information under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K, and those set forth in the Company’s other reports and information filed with the Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov.

 

Non-GAAP Financial Measures

 

Adjusted earnings (loss) is a non-GAAP measure and is defined as net income (loss) 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, net loss attributable to non-controlling interests, and internalization expenses which are generally non-comparable and which represent expenses not substantially related to our ongoing business operations. Fees to manager have been included in Adjusted Earnings for all periods through December 31, 2019 as at that time they related to our then-ongoing business operations as an externally-managed company. For periods subsequent to December 31, 2019, Fees to manager are not included in Adjusted Earnings as they no longer relate to our ongoing business operations as an internally-managed company following the Internalization. The Company paid a prorated management fee to the Manager for the period during the first quarter of 2020 prior to the completion of the Internalization and will no longer pay management fees going forward. Management uses Adjusted earnings (loss) and Adjusted earnings (loss) per 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 (loss) 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 (loss) and Adjusted earnings (loss) per share may not be comparable to other key performance indicators reported by other REITs or real estate companies. Reconciliations of Adjusted earnings (loss) and Adjusted earnings (loss) per share to Net income (loss) attributable to common stockholders and Earnings (loss) per share, respectively, are provided in the attached table entitled “Calculation of Adjusted Earnings (Loss).”

 

Contact:

Jernigan Capital, Inc.

David Corak

(901) 567-9580

Investorrelations@jernigancapital.com

 

5

JERNIGAN CAPITAL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)

 

 

 

 

 

 

 

 

 

 

As of

 

 

March 31, 2020

 

December 31, 2019

 

 

(unaudited)

 

 

Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,341

 

$

3,278

Self-Storage Investment Portfolio:

 

 

 

 

 

 

Development property investments at fair value

 

 

427,435

 

 

549,684

Self-storage real estate owned, net

 

 

384,424

 

 

230,844

Investment in and advances to self-storage real estate venture

 

 

6,113

 

 

11,247

Other loans, at cost

 

 

219

 

 

4,713

Deferred financing costs

 

 

7,752

 

 

4,154

Prepaid expenses and other assets

 

 

7,925

 

 

8,654

Fixed assets, net

 

 

200

 

 

203

Total assets

 

$

841,409

 

$

812,777

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Secured revolving credit facility

 

$

198,000

 

$

162,000

Term loans, net of unamortized costs

 

 

40,851

 

 

40,791

Due to Manager

 

 

 -

 

 

3,164

Accounts payable, accrued expenses and other liabilities

 

 

7,703

 

 

4,817

Dividends payable

 

 

10,751

 

 

13,131

Total liabilities

 

 

257,305

 

 

223,903

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Series A Cumulative preferred stock

 

 

132,762

 

 

130,637

Series B Cumulative preferred stock

 

 

37,298

 

 

37,298

Common stock

 

 

232

 

 

224

Additional paid-in capital

 

 

450,318

 

 

426,129

Accumulated deficit

 

 

(68,417)

 

 

(5,021)

Accumulated other comprehensive income (loss)

 

 

(1,002)

 

 

(393)

Total Jernigan Capital, Inc. stockholders' equity

 

 

551,191

 

 

588,874

Non-controlling interests

 

 

32,913

 

 

 -

Total equity

 

 

584,104

 

 

588,874

Total liabilities and equity

 

$

841,409

 

$

812,777

 

6

JERNIGAN CAPITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

March 31,

 

 

2020

 

2019

Revenues:

 

 

 

 

Interest income from investments

 

$

7,758

 

$

8,212

Rental and other property-related income from real estate owned

 

 

3,878

 

 

1,450

Other revenues

 

 

61

 

 

222

Total revenues

 

 

11,697

 

 

9,884

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

General and administrative expenses

 

 

2,764

 

 

1,762

Fees to Manager

 

 

1,230

 

 

2,003

Property operating expenses of real estate owned

 

 

2,047

 

 

762

Depreciation and amortization of real estate owned

 

 

3,584

 

 

1,029

Goodwill impairment loss

 

 

4,738

 

 

 -

Internalization expenses

 

 

37,783

 

 

 -

Total costs and expenses

 

 

52,146

 

 

5,556

 

 

 

 

 

 

 

Operating income (loss)

 

 

(40,449)

 

 

4,328

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

Equity in earnings (losses) from unconsolidated real estate venture

 

 

(165)

 

 

156

Net unrealized gain (loss) on investments

 

 

(10,962)

 

 

8,830

Interest expense

 

 

(3,212)

 

 

(1,213)

Other interest income

 

 

 6

 

 

13

Total other income (loss)

 

 

(14,333)

 

 

7,786

Net income (loss)

 

$

(54,782)

 

$

12,114

Net income attributable to preferred stockholders

 

 

(5,207)

 

 

(5,032)

Less: Net loss attributable to non-controlling interests

 

 

1,947

 

 

 -

Net income (loss) attributable to common stockholders

 

$

(58,042)

 

$

7,082

 

 

 

 

 

 

 

Basic earnings (loss) per share attributable to common stockholders

 

$

(2.53)

 

$

0.35

Diluted earnings (loss) per share attributable to common stockholders

 

$

(2.53)

 

$

0.35

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.23

 

$

0.35

 

7

JERNIGAN CAPITAL, INC.
CALCULATION OF ADJUSTED EARNINGS (LOSS)
(in thousands, except share and per share data)
(unaudited)

 

 

 

 

 

 

 

 

 

Three months ended

 

 

March 31, 2020

 

March 31, 2019

Net income (loss) attributable to common stockholders

 

$

(58,042)

 

$

7,082

Plus: stock dividends to preferred stockholders

 

 

2,125

 

 

2,125

Plus: stock-based compensation

 

 

606

 

 

328

Plus: net loss attributable to non-controlling interests

 

 

(1,947)

 

 

 -

Plus: fees to Manager

 

 

1,230

 

 

 -

Plus: depreciation and amortization on real estate assets

 

 

3,584

 

 

1,029

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

63

 

 

56

Plus: goodwill impairment loss

 

 

4,738

 

 

 -

Plus: internalization expenses

 

 

37,783

 

 

 -

Adjusted Earnings (loss)

 

$

(9,860)

 

$

10,620

 

 

 

 

 

 

 

Adjusted Earnings (loss) per share attributable to common stockholders – diluted

 

$

(0.42)

 

$

0.52

 

 

 

 

 

 

 

Weighted average shares of common stock and units outstanding – diluted

 

 

23,827,957

 

 

20,455,116

 

 

 

8

JERNIGAN CAPITAL, INC.
CALCULATION OF EARNINGS (LOSS) PER SHARE AND ADJUSTED EARNINGS (LOSS) PER SHARE
(in thousands, except share and per share data)
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended
March 31,

 

 

 

2020

 

2019

 

Shares outstanding:

 

 

 

 

 

 

 

Weighted average common shares - basic

 

 

22,973,028

 

 

20,297,551

 

Effect of dilutive securities(1)

 

 

 -

 

 

157,565

 

Weighted average common shares

 

 

22,973,028

 

 

20,455,116

 

 

 

 

 

 

 

 

 

Calculation of Earnings per Share - basic

 

 

 

 

 

 

 

Net income (loss)

 

$

(54,782)

 

$

12,114

 

Less:

 

 

 

 

 

 

 

Net income allocated to preferred stockholders

 

 

5,207

 

 

5,032

 

Net loss attributable to non-controlling interest

 

 

(1,947)

 

 

 -

 

Net income allocated to unvested restricted shares (2)

 

 

 -

 

 

55

 

Dividends declared on unvested restricted shares

 

 

58

 

 

n/a

 

Net income (loss) attributable to common shareholders, adjusted

 

$

(58,100)

 

$

7,027

 

 

 

 

 

 

 

 

 

Weighted average common shares - basic

 

 

22,973,028

 

 

20,297,551

 

Earnings (loss) per share - basic

 

$

(2.53)

 

$

0.35

 

 

 

 

 

 

 

 

 

Calculation of Earnings per Share - diluted

 

 

 

 

 

 

 

Net income (loss)

 

$

(54,782)

 

$

12,114

 

Less:

 

 

 

 

 

 

 

Net income allocated to preferred stockholders

 

 

5,207

 

 

5,032

 

Dividends declared on unvested restricted shares

 

 

58

 

 

n/a

 

Net income (loss) attributable to common shareholders, adjusted

 

$

(58,100)

 

$

7,082

 

 

 

 

 

 

 

 

 

Weighted average common shares - diluted(1)

 

 

22,973,028

 

 

20,455,116

 

Earnings (loss) per share - diluted

 

$

(2.53)

 

$

0.35

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Earnings per Share - basic

 

 

 

 

 

 

 

Adjusted Earnings (loss)

 

$

(9,860)

 

$

10,620

 

Less:

 

 

 

 

 

 

 

Adjusted Earnings allocated to unvested restricted shares (2)

 

 

 -

 

 

55

 

Dividends declared on unvested restricted shares

 

 

58

 

 

n/a

 

Adjusted Earnings (loss) attributable to common stockholders – two-class method

 

$

(9,918)

 

$

10,565

 

 

 

 

 

 

 

 

 

Weighted average common shares and OC units – basic(3)

 

 

23,827,957

 

 

20,297,551

 

Adjusted Earnings (loss) per share – basic

 

$

(0.42)

 

$

0.52

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Earnings per Share - diluted

 

 

 

 

 

 

 

Adjusted Earnings (loss) attributable to common stockholders – two-class method

 

$

(9,918)

 

$

10,620

 

 

 

 

 

 

 

 

 

Weighted average common shares and OC Units – diluted(3)

 

 

23,827,957

 

 

20,455,116

 

Adjusted Earnings (loss) per share – diluted

 

$

(0.42)

 

$

0.52

 

(1)

Diluted earnings per share is calculated on the more dilutive of the treasury stock method or two-class method.  For the three months ended March 31, 2020, 854,929 OC Units and their related loss as well as 232,831 unvested restricted shares were excluded from the calculation of diluted shares as they are not dilutive.

(2)

Unvested restricted shares of common stock with vesting based on service participate in dividends with unrestricted shares of common stock on a 1:1 basis and thus are considered participating securities under the two-class method for the three months ended March 31, 2020 and 2019.  Under the two-class method, losses are not allocated to participating securities, therefore no loss was allocated to unvested restricted shares for the three months ended March 31, 2020.

(3)

For the three months ended March 31, 2020, includes 854,929 weighted average OC Units.

9

EX-99.2 3 jcap-20200507ex9926a3b68.htm EXHIBIT 99.2 jcap_Ex99_2

Exhibit 99.2

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First Quarter 2020

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1

 

 

First Quarter 2020

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2

 

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 the duration, severity and impact of the COVID-19 pandemic and resulting economic downturn, 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, 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:

 

·

the negative impact of the ongoing COVID-19 pandemic and the measures intended to prevent its spread, which, in addition to exacerbating the risks set forth below, may result in:

o

a prolonged global economic downturn, recession or depression;

o

reductions in move-ins at the properties that we own;

o

slower increases in physical occupancy, or decreases in occupancy, due to declines in discretionary household income and rates of consumption;

o

temporary holds on existing customer rental rate increases and the deferral of auctions of delinquent tenants initiated by our third-party managers, as well as slower rent collections and potential increases in uncollectible accounts;

o

the delay in construction or development of certain of our investments and the cancellation of certain potential investments;

o

adverse impacts on the value of our debt investments due to impairment of our developers’ ability to make timely payments and disruptions in the capital markets that have negatively impacted the values of debt instruments;

o

adverse impacts on assumptions made in evaluating our investments accounted for using the fair value method;

o

the interplay of the pandemic and over-development in the self-storage industry; and

o

the adverse impacts on developers and development with respect to which we have made investments;

·

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 acquire our developers’ interests on favorable terms;

·

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

·

our ability to increase rental rates;

·

the future availability of borrowings under our credit facility (including borrowing base capacity, compliance with covenants and the availability of the accordion feature);

·

availability and terms of equity and debt capital, as well as our rate of deployment of such capital (which may worsen as result of the COVID-19 pandemic);

·

our ability to hire and retain qualified personnel;

·

our ability to recognize the anticipated benefits from the internalization of our manager;

·

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 created by the current economic turmoil or otherwise;

·

potential limitations on our ability to pay dividends at expected rates or other changes to our 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 (which has significantly increased as a result of the COVID-19 pandemic) 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.

 

 

First Quarter 2020

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3

 

Non-GAAP Financial Measures

 

Adjusted Earnings (loss) is a non-GAAP measure and is defined as net income (loss) attributable to common stockholders plus stock dividends to preferred stockholders, stock-based compensation expense, net loss attributable to non-controlling interests, fees to Manager, depreciation and amortization on real estate assets, depreciation and amortization on SL1 Venture real estate assets, goodwill impairment loss, and internalization expenses which are generally non-comparable and which represent expenses not substantially related to our ongoing business operations. Fees to manager have been included in Adjusted Earnings (loss) for all periods through December 31, 2019 as at that time they related to our then-ongoing business operations as an externally-managed company. For periods subsequent to December 31, 2019, Fees to manager are not included in Adjusted Earnings (loss) as they no longer relate to our ongoing business operations as an internally-managed company following the Internalization. We have paid a prorated management fee to the Manager for the period during the first quarter of 2020 prior to the completion of the Internalization and will no longer pay management fees going forward. Management uses Adjusted Earnings (loss) and Adjusted Earnings (loss) per 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 (loss) 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 (loss) and Adjusted Earnings (loss) per share may not be comparable to other key performance indicators reported by other REITs or real estate companies. Reconciliations of Adjusted Earnings (loss) and Adjusted Earnings (loss) per share to Net income (loss) attributable to common stockholders and Earnings (loss) per share, respectively, are provided in the attached table entitled “Calculation of Adjusted Earnings (loss).”

 

First Quarter 2020

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4

 

Press Release – May 2020

 

Jernigan Capital Reports First Quarter Results

 

MEMPHIS, Tennessee, May 7, 2020 / 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 March 31, 2020.

 

First Quarter Highlights include:

 

§

$(2.53) loss per share, including $(0.46) related to change in fair value of investments and $(1.84) related to internalization expenses, goodwill impairment and the final payment of management fees to JCAP Advisors LLC for the period prior to internalization.

 

§

Adjusted loss per share of $(0.42), including $(0.46) related to change in fair value of investments.

 

§

Enhanced shareholder/management alignment of interests and reduced run-rate G&A expense by approximately 40% with the internalization of JCAP Advisors LLC, the Company’s external advisor, on February 20, 2020.

 

§

Enhanced liquidity position by increasing size of revolving credit facility from $235 million to $375 million, reducing interest rate, improving covenants and attracting new banks.

 

§

Increased the number of wholly owned self-storage facilities on its balance sheet or in its SL1 Joint Venture from 20 to 29 through developer buyouts of nine development property investments including the Fort Lauderdale, Boston 2, Atlanta 4, Atlanta 6, Atlanta 5, Atlanta 3, Charlotte 2, Knoxville, and Louisville 1 development property investments.

 

§

Commenced leasing of Generation V self-storage facilities underlying two development property investments in which the Company has an aggregate committed investment of $25.5 million, 49.9% profits interests and ROFRs.

 

 

Subsequent Events include:

 

§

Acquired 100% of the Class A membership units of the LLCs that own the Raleigh and Jacksonville 3 development property investments. With these acquisitions, the Company now wholly owns 31 facilities on its balance sheet or in its SL1 Joint Venture, representing approximately 41% of its total portfolio by net rentable square feet.

 

§

Entered into a $100 million interest rate swap and a $100 million interest rate cap on the Company’s $375 million senior secured revolving line of credit, locking in a maximum one-month LIBOR of 0.43% on $200 million of debt capital through March 24, 2023. With these contracts in place, the Company has locked in a maximum cost of debt on $200 million of debt capital at approximately 3.1%, which it anticipates will decrease as investments underlying the borrowing base mature.

 

“The year started very strongly for JCAP,” stated John Good, Chairman and Chief Executive Officer. “We accomplished a major goal set at the time of our IPO in March 2015 with the internalization of JCAP Advisors on February 20th in a transaction that we believe was very beneficial to shareholders and positioned the Company for future success through the alignment of interests and the right-sizing of corporate G&A. We improved the balance sheet by opportunistically issuing $15.4 million of common stock in the first few days of the year, and subsequently by upsizing our credit facility to $375 million and improving the pricing and covenants in the early days of the COVID-19 pandemic. Between cash on the balance sheet, increased availability on the credit facility, reduced commitments and cost savings, we are confident that we will have sufficient liquidity to cover all our commitments for the foreseeable future.”

 

“We continued to effectively execute the Company’s business plan of consolidating ownership of the projects we finance by acquiring the developers’ interests in nine newly developed, state-of-the-art Generation V self-storage properties that we had previously financed. Our best-of-class portfolio of Generation V self-storage properties continued to lease-up well and increase rates, resulting in revenue exceeding the top end of our guidance range and net operating income exceeding expectations on our owned properties by 31%. Our facilities that we wholly owned on balance sheet as of March 31, 2020, excluding those placed in service during the quarter, gained 388 basis points of occupancy during the quarter.”

 

 

“While the start to 2020 was strong, we, like the rest of the world have been profoundly impacted by the COVID-19 pandemic,” continued Mr. Good. “Since the outbreak began, our priority has been and remains the health and safety of our teammates, our customers, our developer partners and the employees staffing our stores for our operating partners. We encouraged teammates to work from home beginning the week of March 16th and officially closed our corporate offices in Memphis on March 25th to promote social distancing. We experienced a seamless transition to our new remote working conditions and have continued to function very well with state-of-the-art technology. Our third-party operating partners continue to safely and effectively operate each of our facilities with initiatives in-place to promote social distancing and the well-being of the communities in which we operate. All of our stores have remained open throughout this pandemic and are actively fulfilling the needs of both

 

First Quarter 2020

Picture 7

 

5

 

new and existing customers. We are thankful to be in the self-storage sector, a business that reliably meets essential needs of customers during times of uncertainty and change.”

 

“We have been very proactive in making sure the Company is well positioned to not only withstand the impacts of the pandemic, but to prosper in any resulting environment,” continued Mr. Good. “Actions taken since the pandemic began include:

 

·

evaluating and suspending non-essential expenditures;

·

increasing the capacity of the credit facility, improving the terms and fixing the interest rate on $200 million of debt at a maximum of approximately 3.1% through March 24, 2023;

·

increasing the frequency of communication with our third-party managers to interactively monitor operations and overall performance;

·

re-assessing five development projects for which either development or construction had not yet commenced and agreeing with developers to discontinue funding those projects; and

·

actively engaging with developer partners and increasing discussions with potential joint venture partners to take advantage of the pending acquisitions cycle.

 

These efforts have increased our cash position, bolstered liquidity and eliminated unnecessary costs in a time of uncertainty, while allowing for the continued execution of the business plan.”

 

“While we believe we are doing all the right things to address the dramatic effect of the pandemic on our lives and our business, we, like everyone else, have suffered what we believe to be a temporary loss of customers, operating momentum and asset value. Looking forward, it is too early to project the ultimate impact of the pandemic and resulting economic downturn on our operations. We are certain that core operations for the remainder of the year will be below original expectations and it will take longer to stabilize our properties in lease up. Accordingly, we have adjusted downward the fair values of our development property investments to take into account longer lease-up periods and lower short-term rental rates due to the COVID-19 pandemic occurring during a period of elevated supply and interrupting the 2020 leasing season, as well as the effect of a dramatic widening of credit spreads at the onset of the pandemic. The extent of the lingering impact to our operations and fair value will largely depend on the duration and magnitude of the pandemic and the eventual recovery. With this general uncertainty and lack of visibility, we are withdrawing our earnings per share and adjusted earnings per share guidance ranges for the full-year 2020, and we will reevaluate our guidance at such time as visibility improves and we can predict with better certainty our results of operations.”

 

“To be clear, our fair value write-down and withdrawal of guidance should in no respect be viewed as a loss of confidence in our portfolio or in the longer-term performance of self-storage properties. Many of our properties are in states that were among the earliest to relax “safer-at-home” orders, namely Colorado, Florida, Georgia, Minnesota, South Carolina and Texas. Notwithstanding the economic trauma and the far-reaching impact of the COVID-19 pandemic, the self-storage industry is equipped to perform better than most other sectors of commercial real estate because of its low capital expenditures, the multitude of demand drivers and the power of branding,” continued Mr. Good. “The pandemic will drive changes in peoples’ lives, and change drives storage demand. We are confident in our portfolio of newly developed self-storage facilities, our underlying business strategy, and the brands and management capabilities of our third-party managers.”

 

Financial Highlights

 

Total revenues for the quarter ended March 31, 2020 were $11.7 million representing an increase of $1.8 million, or 18%, over total revenues for the quarter ended March 31, 2019. Total interest income from investments for the three months ended March 31, 2020 was $7.8 million, a decrease of approximately $0.5 million, or 6%, from the three months ended March 31, 2019. The decrease is primarily attributable to a decrease in the principal amount of development loans and bridge loans outstanding as a result of our acquisitions of developer interests in 17 additional self-storage facilities. At the same time, rental revenue was $3.9 million for the three months ended March 31, 2020, an increase of $2.4 million, or 167%, over rental revenue of $1.5 million reported for the same period in 2019. This increase is the result of 17 acquisitions of our developer’s interests during 2019 and the three months ended March 31, 2020 coupled with increased property net operating income on existing real estate owned resulting from higher occupancy and rental rates.

 

Total general and administrative expenses, including fees to manager, for the three months ended March 31, 2020 were $4.0 million, an increase of $0.2 million, or 6%, from the three months ended March 31, 2019, primarily due to annual compensation increases, as well as the addition of two professional employees during the third quarter of 2019 who were hired for various functions rendered necessary by our conversion to an equity REIT. However, on a linked quarterly basis (first quarter 2020 compared to fourth quarter 2019), total general and administrative expenses declined approximately 8%, from $4.3 million in the fourth quarter 2019 to $4.0 million in the first quarter 2020. Compensation and benefits included non-cash expense of stock-based compensation of $0.6 million and $0.3 million for the three months ended March 31, 2020 and 2019, respectively. The Company consummated the internalization on February 20, 2020, and incurred $1.2 million of management fees up to that date. Beginning with the second quarter 2020, the Company will no longer incur fees to manager.

 

The Company incurred a net unrealized loss on investments of $11.0 million for the three months ended March 31, 2020, compared to a net unrealized gain of $8.8 million for the comparable period in 2019. The loss, and decrease compared to prior year, is attributable to (1) a significant decrease in the number of investments carried at fair value due to a significant increase in the number of properties owned outright, (2) fewer facilities achieving substantial completion in the 2020 period on account of reduced construction/development activity and delays due to the pandemic, (3) a prolonged economic stabilization of properties underlying investments carried at fair value, including longer physical lease-up

 

First Quarter 2020

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6

 

periods and lower rates, due to the COVID-19 pandemic and its occurrence during a period of elevated new supply, and (4) a significant widening of credit spreads near the end of the first quarter caused by the pandemic and the resulting dramatic and rapid economic downturn.

 

Internalization expenses were $37.8 million for the quarter ended March 31, 2020 and were comprised of $37.4 million of expenses for the settlement of the pre-existing contractual agreement with the Manager and $0.4 million of acquisition-related expenses, both of which related to the Internalization. The Internalization also resulted in the Company recording goodwill of $4.7 million in its Consolidated Balance Sheets as of the date of acquisition. Generally accepted accounting principles (“GAAP”) require that the Company evaluate goodwill for impairment annually unless a triggering event occurs prior to that date. The Company determined that triggering events had occurred as a result of the COVID-19 pandemic and analyzed the goodwill for impairment. The Company determined that as of the measurement date the carrying value of its single reporting unit exceeded the fair value, resulting in a goodwill impairment loss of $4.7 million.

 

Loss per share and adjusted loss per share for the quarter ended March 31, 2020 were $(2.53) and $(0.42), respectively. Net loss attributable to common stockholders for the quarter ended March 31, 2020 was $58.0 million, compared to $7.1 million net income attributable to common stockholders for the comparable quarter in 2019. The decrease is largely attributable to the expense of internalization of $37.8 million, the goodwill impairment of $4.7 million and the net unrealized loss on investments carried at fair value, all as previously discussed.

 

Capital Markets, Capital Recycling & Liquidity Update

 

In January, the Company issued an aggregate $15.4 million of common stock under the Company’s at-the-market program at a weighted average share price of $19.07.

 

On March 26, 2020, the Company entered into an amended and restated senior secured revolving credit facility of up to $375 million with a syndicate of banks led by KeyBank National Association and BMO Harris Bank N.A. The $375 million credit facility, which has an accordion feature permitting expansion up to $750 million, subject to certain conditions including obtaining additional commitments from lenders, has a three-year term that expires March 24, 2023 and two one-year extension options.

 

·

Upsized to $375 million from $235 million

·

Credit spreads lowered by 15-25 basis points

·

Maturity extended by approximately 1 ¼ years to March 24, 2023, plus two one-year extensions

·

Financial covenant package updated to support the Company’s growth plan

·

Added three new banks including Truist Bank, Synovus Bank and IberiaBank

 

Borrowings under the credit facility are secured by three separate pools of collateral: one consisting of the Company’s development property investments, one consisting of non-stabilized self-storage properties wholly-owned by the Company, and the last consisting of stabilized self-storage properties wholly-owned by the Company. Advances under the credit agreement bear interest at rates between 210 and 300 basis points over 30-day LIBOR. These spreads are 15 to 25 basis points lower than the spreads under the previous credit facility, which were between 225 and 325 basis points. The Company’s weighted average spread based on its current borrowing base as of March 31, 2020 was 2.65%.

 

On May 4, 2020 and May 6, 2020, the Company entered into a $100 million interest rate swap and a $100 million interest rate cap on the Company’s senior secured line of credit, respectively, locking in a maximum one-month LIBOR of 0.43% on $200 million of outstanding credit facility through March 24, 2023 (the maturity date of the credit facility). With these contracts in place, the Company has locked in a maximum cost of debt on $200 million of debt capital at approximately 3.1%, which it expects to decline as the assets constituting the borrowing base mature.

 

In February, the Company’s only land loan was repaid for net proceeds to the Company of $3.8 million. The loan had been categorized on the Company’s consolidated balance sheet as part of other loans.

 

“We continue to monitor the effect of the pandemic on our operations and liquidity during these unprecedented times,” noted Kelly Luttrell, SVP and Chief Financial Officer. “With our upsized $375 million credit facility, ATM sales prior to the pandemic, and closed as well as potential capital recycling opportunities, we believe we are well positioned to fund our existing development commitments, opportunistically acquire developers’ interests and operate our core business as planned. Our contractual investment commitments in our development pipeline are now fully covered at conservative leverage levels for the foreseeable future, and we have the ability to continue to execute developer buy-outs opportunistically. As of the close of business on May 7, 2020, we have approximately $225 million drawn on the line with an additional $25 million of availability. We also have approximately $16 million of unrestricted cash on hand. By the end of the year, we expect borrowing base availability to be between $280 million and $310 million.”

 

Dividends

 

On February 21, 2020 the Company declared cash and stock dividends on its Series A Preferred Stock. The cash dividend of $2.4 million was paid on April 15, 2020 to holders of record on April 1, 2020. A stock dividend of 2,125 shares of additional Series A Preferred Stock was issued on April 15, 2020 to holders of record on April 1, 2020 for an aggregate value of $2.1 million pursuant to the terms of the Stock Purchase Agreement.

 

First Quarter 2020

Picture 7

 

7

 

On February, 21 2020, the Company declared a cash dividend on its Series B Preferred Stock. The cash dividend of $0.7 million was paid on April 15, 2020 to holders of record on April 1, 2020.

On February, 21 2020, the Company declared a dividend of $0.23 per common share. The dividend was paid on April 15, 2020 to common stockholders of record on April 1, 2020.

 

Suspending Full-Year 2020 Guidance

 

COVID-19 was characterized on March 11, 2020 by the World Health Organization as a pandemic. The extent to which the COVID-19 pandemic impacts our future operations, financial condition and financial results will depend on future developments, which are highly uncertain, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. With the uncertainty and lack of visibility with respect to economic recovery, the Company is withdrawing our earnings per share and adjusted earnings per share guidance ranges for the full-year 2020, and will revisit earnings guidance at such time as visibility improves and the Company can predict with better certainty our results of operations.

 

First Quarter 2020

Picture 7

 

8

 

Jernigan Capital, Inc.

Financial Highlights- Trailing Five Quarters

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2020

 

2019

 

2019

 

2019

 

2019

Operating Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, rental-related income and other revenues

 

$

11,697

 

$

12,128

 

$

12,249

 

$

10,832

 

$

9,884

JV income

 

 

(165)

 

 

160

 

 

165

 

 

85

 

 

156

Total revenues and JV income

 

 

11,532

 

 

12,288

 

 

12,414

 

 

10,917

 

 

10,040

General & administrative expenses

 

 

(3,994)

 

 

(4,341)

 

 

(4,268)

 

 

(4,442)

 

 

(3,765)

Property operating expenses of real estate owned

 

 

(2,047)

 

 

(1,456)

 

 

(989)

 

 

(786)

 

 

(762)

Depreciation and amortization of real estate owned

 

 

(3,584)

 

 

(2,704)

 

 

(1,372)

 

 

(1,090)

 

 

(1,029)

Interest expense

 

 

(3,212)

 

 

(2,965)

 

 

(2,546)

 

 

(1,776)

 

 

(1,213)

Subtotal

 

 

(1,305)

 

 

822

 

 

3,239

 

 

2,823

 

 

3,271

Net unrealized gain (loss) on investments

 

 

(10,962)

 

 

7,555

 

 

7,974

 

 

12,043

 

 

8,830

Internalization expenses

 

 

(37,783)

 

 

(1,918)

 

 

(268)

 

 

 -

 

 

 -

Goodwill impairment loss

 

 

(4,738)

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Other interest income

 

 

 6

 

 

 6

 

 

 9

 

 

 8

 

 

13

Net income (loss)

 

 

(54,782)

 

 

6,465

 

 

10,954

 

 

14,874

 

 

12,114

Net income attributable to preferred stockholders

 

 

(5,207)

 

 

(5,195)

 

 

(5,157)

 

 

(5,094)

 

 

(5,032)

Less: Net loss attributable to non-controlling interests

 

 

1,947

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Net income (loss) attributable to common stockholders

 

$

(58,042)

 

$

1,270

 

$

5,797

 

$

9,780

 

$

7,082

Plus: stock dividends to preferred stockholders

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

Plus: stock-based compensation

 

 

606

 

 

553

 

 

549

 

 

719

 

 

328

Plus: net loss attributable to non-controlling interests

 

 

(1,947)

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Plus: fees to Manager

 

 

1,230

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Plus: depreciation and amortization on real estate assets

 

 

3,584

 

 

2,704

 

 

1,372

 

 

1,090

 

 

1,029

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

63

 

 

93

 

 

82

 

 

82

 

 

56

Plus: goodwill impairment loss

 

 

4,738

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Plus: internalization expenses

 

 

37,783

 

 

1,918

 

 

268

 

 

 -

 

 

 -

Adjusted Earnings (loss)

 

$

(9,860)

 

$

8,663

 

$

10,193

 

$

13,796

 

$

10,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share attributable to common stockholders

 

$

(2.53)

 

$

0.06

 

$

0.26

 

$

0.46

 

$

0.35

Diluted earnings (loss) per share attributable to common stockholders

 

$

(2.53)

 

$

0.06

 

$

0.26

 

$

0.46

 

$

0.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings (loss) per share attributable to common and OC unit stockholders – diluted

 

$

(0.42)

 

$

0.39

 

$

0.46

 

$

0.65

 

$

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.23

 

$

0.35

 

$

0.35

 

$

0.35

 

$

0.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

22,973,028

 

 

22,035,950

 

 

22,019,875

 

 

21,185,484

 

 

20,297,551

Diluted

 

 

22,973,028

 

 

22,252,115

 

 

22,233,594

 

 

21,387,462

 

 

20,455,116

Shares of common stock outstanding:

 

 

23,271,859

 

 

22,423,283

 

 

22,236,871

 

 

22,133,290

 

 

20,567,694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average OC Units outstanding

 

 

854,929

 

 

 -

 

 

 -

 

 

 -

 

 

 -

OC Units outstanding

 

 

1,877,398

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,341

 

$

3,278

 

$

6,961

 

$

4,169

 

$

3,860

Self-Storage Investment Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development property investments at fair value

 

 

427,435

 

 

549,684

 

 

508,887

 

 

476,889

 

 

405,999

Bridge investments at fair value

 

 

 -

 

 

 -

 

 

 -

 

 

89,478

 

 

87,046

Self-storage real estate owned

 

 

398,100

 

 

240,936

 

 

240,209

 

 

112,099

 

 

111,297

Accumulated depreciation on self-storage real estate owned

 

 

(13,676)

 

 

(10,092)

 

 

(7,387)

 

 

(6,016)

 

 

(4,926)

Self-storage real estate owned, net

 

 

384,424

 

 

230,844

 

 

232,822

 

 

106,083

 

 

106,371

Investment in and advances to self-storage real estate venture

 

 

6,113

 

 

11,247

 

 

11,027

 

 

12,416

 

 

12,360

Total assets

 

 

841,409

 

 

812,777

 

 

776,233

 

 

703,292

 

 

630,632

Gross assets

 

 

855,085

 

 

822,869

 

 

783,620

 

 

709,308

 

 

635,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured revolving credit facility

 

 

198,000

 

 

162,000

 

 

125,000

 

 

62,900

 

 

27,000

Term loans, net of unamortized costs

 

 

40,851

 

 

40,791

 

 

40,735

 

 

33,711

 

 

33,716

Total liabilities

 

 

257,305

 

 

223,903

 

 

186,816

 

 

116,437

 

 

77,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Jernigan Capital, Inc. stockholders' equity

 

 

551,191

 

 

588,874

 

 

589,417

 

 

586,855

 

 

552,801

Non-controlling interests

 

 

32,913

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Total equity

 

 

584,104

 

 

588,874

 

 

589,417

 

 

586,855

 

 

552,801

 

First Quarter 2020

Picture 7

 

9

 

Jernigan Capital, Inc.

Consolidated Balance Sheets-Trailing Five Quarters

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2020

 

2019

 

2019

 

2019

 

2019

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,341

 

$

3,278

 

$

6,961

 

$

4,169

 

$

3,860

Self-Storage Investment Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development property investments at fair value

 

 

427,435

 

 

549,684

 

 

508,887

 

 

476,889

 

 

405,999

Bridge investments at fair value

 

 

 -

 

 

 -

 

 

 -

 

 

89,478

 

 

87,046

Self-storage real estate owned, net

 

 

384,424

 

 

230,844

 

 

232,822

 

 

106,083

 

 

106,371

Investment in and advances to self-storage real estate venture

 

 

6,113

 

 

11,247

 

 

11,027

 

 

12,416

 

 

12,360

Other loans, at cost

 

 

219

 

 

4,713

 

 

4,417

 

 

4,576

 

 

5,025

Deferred financing costs

 

 

7,752

 

 

4,154

 

 

4,090

 

 

4,327

 

 

4,404

Prepaid expenses and other assets

 

 

7,925

 

 

8,654

 

 

7,813

 

 

5,129

 

 

5,348

Fixed assets, net

 

 

200

 

 

203

 

 

216

 

 

225

 

 

219

Total assets

 

$

841,409

 

$

812,777

 

$

776,233

 

$

703,292

 

$

630,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured revolving credit facility

 

$

198,000

 

$

162,000

 

$

125,000

 

$

62,900

 

$

27,000

Term loans, net of unamortized costs

 

 

40,851

 

 

40,791

 

 

40,735

 

 

33,711

 

 

33,716

Due to Manager

 

 

 -

 

 

3,164

 

 

2,749

 

 

2,453

 

 

2,267

Accounts payable, accrued expenses and other liabilities

 

 

7,703

 

 

4,817

 

 

5,392

 

 

4,526

 

 

2,612

Dividends payable

 

 

10,751

 

 

13,131

 

 

12,940

 

 

12,847

 

 

12,236

Total liabilities

 

$

257,305

 

$

223,903

 

$

186,816

 

$

116,437

 

$

77,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A Cumulative preferred stock

 

$

132,762

 

$

130,637

 

$

128,512

 

$

126,387

 

$

124,262

Series B Cumulative preferred stock

 

 

37,298

 

 

37,298

 

 

37,298

 

 

37,298

 

 

37,298

Common stock

 

 

232

 

 

224

 

 

222

 

 

221

 

 

205

Additional paid-in capital

 

 

450,318

 

 

426,129

 

 

422,240

 

 

419,760

 

 

389,431

Retained earnings (accumulated deficit)

 

 

(68,417)

 

 

(5,021)

 

 

1,645

 

 

3,630

 

 

1,605

Accumulated other comprehensive income (loss)

 

 

(1,002)

 

 

(393)

 

 

(500)

 

 

(441)

 

 

 -

Total Jernigan Capital, Inc. stockholders' equity

 

 

551,191

 

 

588,874

 

 

589,417

 

 

586,855

 

 

552,801

Non-controlling interests

 

 

32,913

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Total equity

 

 

584,104

 

 

588,874

 

 

589,417

 

 

586,855

 

 

552,801

Total liabilities and equity

 

$

841,409

 

$

812,777

 

$

776,233

 

$

703,292

 

$

630,632

 

 

 

 

First Quarter 2020

Picture 7

 

10

 

Jernigan Capital, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Three months ended

 

 

March 31,

 

 

2020

 

2019

Revenues:

 

 

 

 

Interest income from investments

 

$

7,758

 

$

8,212

Rental and other property-related income from real estate owned

 

 

3,878

 

 

1,450

Other revenues

 

 

61

 

 

222

Total revenues

 

 

11,697

 

 

9,884

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

General and administrative expenses

 

 

2,764

 

 

1,762

Fees to Manager

 

 

1,230

 

 

2,003

Property operating expenses of real estate owned

 

 

2,047

 

 

762

Depreciation and amortization of real estate owned

 

 

3,584

 

 

1,029

Goodwill impairment loss

 

 

4,738

 

 

 -

Internalization expenses

 

 

37,783

 

 

 -

Total costs and expenses

 

 

52,146

 

 

5,556

 

 

 

 

 

 

 

Operating income (loss)

 

 

(40,449)

 

 

4,328

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

Equity in earnings (losses) from unconsolidated real estate venture

 

 

(165)

 

 

156

Net unrealized gain (loss) on investments

 

 

(10,962)

 

 

8,830

Interest expense

 

 

(3,212)

 

 

(1,213)

Other interest income

 

 

 6

 

 

13

Total other income (loss)

 

 

(14,333)

 

 

7,786

Net income (loss)

 

$

(54,782)

 

$

12,114

Net income attributable to preferred stockholders

 

 

(5,207)

 

 

(5,032)

Less: Net loss attributable to non-controlling interests

 

 

1,947

 

 

 -

Net income (loss) attributable to common stockholders

 

$

(58,042)

 

$

7,082

 

 

 

 

 

 

 

Basic earnings (loss) per share attributable to common stockholders

 

$

(2.53)

 

$

0.35

Diluted earnings (loss) per share attributable to common stockholders

 

$

(2.53)

 

$

0.35

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.23

 

$

0.35

 

 

First Quarter 2020

Picture 7

 

11

 

Jernigan Capital, Inc.

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2020

 

2019

 

2019

 

2019

 

2019

Net income (loss) attributable to common stockholders

 

$

(58,042)

 

$

1,270

 

$

5,797

 

$

9,780

 

$

7,082

Plus: stock dividends to preferred stockholders

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

 

 

2,125

Plus: stock-based compensation

 

 

606

 

 

553

 

 

549

 

 

719

 

 

328

Plus: net loss attributable to non-controlling interests

 

 

(1,947)

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Plus: fees to Manager

 

 

1,230

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Plus: depreciation and amortization on real estate assets

 

 

3,584

 

 

2,704

 

 

1,372

 

 

1,090

 

 

1,029

Plus: depreciation and amortization on SL1 Venture real estate assets

 

 

63

 

 

93

 

 

82

 

 

82

 

 

56

Plus: goodwill impairment loss

 

 

4,738

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Plus: internalization expenses

 

 

37,783

 

 

1,918

 

 

268

 

 

 -

 

 

 -

Adjusted Earnings (loss)

 

$

(9,860)

 

$

8,663

 

$

10,193

 

$

13,796

 

$

10,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings (loss) per share attributable to common and OC unit stockholders – diluted

 

$

(0.42)

 

$

0.39

 

$

0.46

 

$

0.65

 

$

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock and OC units outstanding – diluted

 

 

23,827,957

 

 

22,252,115

 

 

22,233,594

 

 

21,387,462

 

 

20,455,116

 

 

 

 

First Quarter 2020

Picture 7

 

12

 

JCAP Wholly Owned Properties

As of March  31, 2020
(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(MSA)

 

Date

 

Date

 

Size

 

Months

 

% Physical

 

 

JCAP Capital

Address

 

Opened

 

Acquired

 

(NRSF) (1)

 

Open (2)

 

Occupancy (2)

 

 

Investment (3)

Atlanta 2
340 Franklin Gateway SE

 

5/24/2016

 

2/2/2018

 

66,187

 

47

 

83.6

%

 

 

 

8,766

Atlanta 1
5110 McGinnis Ferry Rd

 

5/25/2016

 

2/2/2018

 

71,718

 

47

 

87.2

%

 

 

 

10,467

Atlanta 4
4676 S Atlanta Rd

 

7/12/2018

 

2/21/2020

 

104,072

 

22

 

42.2

%

 

 

 

17,611

Atlanta 6
2033 Monroe Dr

 

10/15/2018

 

2/10/2020

 

82,690

 

19

 

43.4

%

 

 

 

15,031

Atlanta 5
56 Peachtree Valley Rd NE

 

4/8/2019

 

2/10/2020

 

87,150

 

13

 

32.1

%

 

 

 

21,910

Atlanta 3
1484 Northside Dr NW

 

8/6/2019

 

2/10/2020

 

93,283

 

9

 

27.3

%

 

 

 

16,790

Atlanta MSA

 

 

 

 

 

505,100

 

26

 

49.7

%

(4)

 

$

90,575

Miami 6
590 NW 137th Ave

 

8/12/2016

 

9/17/2019

 

76,765

 

45

 

85.0

%

 

 

 

 -

Miami 4
1103 SW 3rd Ave

 

10/9/2016

 

9/17/2019

 

74,635

 

43

 

93.5

%

 

 

 

 -

Miami 8
2434 SW 28th Lane

 

12/12/2016

 

9/17/2019

 

51,923

 

41

 

90.4

%

 

 

 

 -

Miami 7
18460 Pines Blvd

 

3/26/2018

 

9/17/2019

 

86,450

 

25

 

69.7

%

 

 

 

 -

Miami 5
4001 NW 77th Ave

 

8/13/2018

 

9/17/2019

 

77,075

 

21

 

66.0

%

 

 

 

 -

Miami
212 NE 26th St

 

2/10/2020

 

7/2/2019

 

69,739

 

3

 

12.9

%

 

 

 

20,574

Miami MSA

 

 

 

 

 

436,587

 

29

 

69.2

%

(4)

 

$

110,190

Charlotte 1
9323 Wright Hill Rd

 

8/18/2016

 

8/31/2018

 

86,750

 

45

 

69.1

%

 

 

 

10,525

Charlotte 2
1010 E 10th St

 

8/30/2018

 

2/10/2020

 

76,545

 

20

 

54.1

%

 

 

 

15,260

Charlotte MSA

 

 

 

 

 

163,295

 

32

 

62.1

%

(4)

 

$

25,785

Jacksonville 1
1939 East West Pkwy

 

8/12/2016

 

1/10/2018

 

59,848

 

45

 

85.7

%

 

 

 

8,687

Jacksonville 2
45 Jefferson Rd

 

3/27/2018

 

8/16/2019

 

70,255

 

25

 

73.6

%

 

 

 

9,491

Jacksonville MSA

 

 

 

 

 

130,103

 

35

 

79.2

%

(4)

 

$

18,178

Orlando 1/2
11920 W Colonial Dr.

 

5/1/2016

 

8/9/2017

 

93,965

 

48

 

91.6

%

 

 

 

12,049

New Haven
453 Washington Ave

 

12/16/2016

 

3/8/2019

 

64,225

 

41

 

85.1

%

 

 

 

9,511

Pittsburgh
6400 Hamilton Ave

 

5/11/2017

 

2/20/2018

 

47,828

 

36

 

68.6

%

 

 

 

8,100

New York City 1
1775 5th Ave

 

9/29/2017

 

12/21/2018

 

105,272

 

31

 

73.6

%

 

 

 

20,440

Louisville 1
2801 N Hurstbourne Pkwy

 

8/15/2018

 

2/10/2020

 

65,871

 

21

 

52.7

%

 

 

 

10,137

Knoxville
130 Jack Dance St

 

11/30/2018

 

2/10/2020

 

72,455

 

17

 

66.5

%

 

 

 

11,139

Boston 2
10 Hampshire Rd

 

3/19/2019

 

2/14/2020

 

76,606

 

13

 

46.5

%

 

 

 

10,889

Fort Lauderdale
5601 NE 14th Ave

 

5/2/2019

 

2/14/2020

 

80,569

 

12

 

57.9

%

 

 

 

14,459

Total Owned Properties

 

 

 

1,841,876

 

29

 

63.7

%

(4)

 

$

341,452

(1)

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.

(2)

As of May 3, 2020.

(3)

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.

(4)

Average weighted based on NRSF.

 

 

 

First Quarter 2020

Picture 7

 

13

 

JCAP Development Property Investments Open and Operating, at Fair Value

As of March 31, 2020

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

(MSA)

 

Investment

Date

 

Months

 

Size

 

% Physical

 

 

 

 

 

Funded

 

Unfunded

 

Fair

Address

 

Date

Opened

 

Open (1)

 

(NRSF) (2)

 

Occupancy (1)

 

 

Commitment

 

Investment

 

Commitment (3)

 

Value

Orlando 3
12709 E Colonial Dr

 

2/24/2017

7/26/2018

 

21

 

69,558

 

59.2

%

 

 

$

8,056

 

$

7,905

 

$

151

 

$

9,741

Orlando 4
9001 Eastmar Commons

 

8/30/2017

1/16/2019

 

16

 

76,340

 

52.9

%

 

 

 

9,037

 

 

8,156

 

 

881

 

 

10,132

Orlando 5
7360 W Sand Lake Rd

 

6/7/2018

12/27/2019

 

4

 

75,736

 

12.2

%

 

 

 

12,969

 

 

11,206

 

 

1,763

 

 

12,480

Orlando MSA

 

 

 

 

14

 

221,634

 

41.0

%

(7)

 

$

30,062

 

$

27,267

 

$

2,795

 

$

32,353

Tampa 4
3201 32nd Ave S

 

6/12/2017

10/9/2018

 

19

 

72,665

 

61.0

%

 

 

 

10,266

 

 

9,808

 

 

458

 

 

12,748

Tampa 3
2460 S Falkenburg Rd

 

5/19/2017

11/29/2018

 

17

 

70,574

 

54.0

%

 

 

 

9,224

 

 

8,470

 

 

754

 

 

10,079

Tampa 2
9125 Ulmerton Rd

 

5/2/2017

5/9/2019

 

12

 

70,967

 

43.7

%

 

 

 

8,091

 

 

7,776

 

 

315

 

 

9,156

Tampa MSA

 

 

 

 

16

 

214,206

 

53.0

%

(7)

 

$

27,581

 

$

26,054

 

$

1,527

 

$

31,983

Minneapolis 2
3216 Winnetka Ave N

 

2/8/2018

3/14/2019

 

14

 

83,648

 

32.6

%

 

 

 

10,543

 

 

10,077

 

 

466

 

 

10,368

Minneapolis 1
631 Transfer Rd

 

11/21/2017

9/3/2019

 

8

 

88,898

 

16.0

%

 

 

 

12,674

 

 

11,281

 

 

1,393

 

 

12,079

Minneapolis 3
101 American Blvd West

 

4/6/2018

12/13/2019

 

5

 

87,375

 

9.2

%

 

 

 

12,883

 

 

10,898

 

 

1,985

 

 

11,713

Minneapolis MSA

 

 

 

 

9

 

259,921

 

19.1

%

(7)

 

$

36,100

 

$

32,256

 

$

3,844

 

$

34,160

Denver 2
3110 S Wadsworth Blvd

 

4/20/2017

7/31/2018

 

21

 

74,307

 

56.2

%

 

 

 

11,164

 

 

11,009

 

 

155

 

 

10,904

Denver 1
6206 W Alameda Ave

 

4/20/2017

6/28/2019

 

10

 

59,524

 

31.5

%

 

 

 

9,806

 

 

9,789

 

 

17

 

 

10,420

Denver MSA

 

 

 

 

16

 

133,831

 

45.2

%

(7)

 

$

20,970

 

$

20,798

 

$

172

 

$

21,324

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

 

6/30/2017

12/28/2018

 

16

 

40,951

 

40.3

%

 

 

 

27,982

 

 

29,692

 

 

163

 

 

29,063

New York City 5
374 S River St

 

12/28/2017

3/9/2020

 

2

 

90,575

 

5.8

%

 

 

 

16,073

 

 

14,991

 

 

1,082

 

 

17,657

New York City MSA

 

 

 

 

9

 

131,526

 

16.6

%

(7)

 

$

44,055

 

$

44,683

 

$

1,245

 

$

46,720

Milwaukee
420 W St Paul Ave

 

7/2/2015

10/9/2016

 

43

 

81,489

 

76.3

%

 

 

 

7,650

 

 

7,648

 

 

 2

 

 

8,503

Austin
251 North A W Grimes Blvd

 

10/27/2015

3/16/2017

 

38

 

76,134

 

94.0

%

 

 

 

8,658

 

 

8,136

 

 

522

 

 

8,111

Raleigh (8)
1515 Sunrise Ave

 

8/14/2015

3/8/2018

 

26

 

60,171

 

80.2

%

 

 

 

8,792

 

 

8,789

 

 

 3

 

 

8,558

Boston 1 (4)
329 Boston Post Rd E

 

6/29/2017

8/8/2018

 

21

 

90,503

 

53.9

%

 

 

 

 -

 

 

 -

 

 

 -

 

 

3,700

Louisville 2
3415 Bardstown Rd

 

9/28/2017

8/31/2018

 

20

 

76,603

 

48.9

%

 

 

 

9,940

 

 

9,695

 

 

245

 

 

11,252

Jacksonville 3 (8)
2004 Edison Ave

 

7/27/2017

11/6/2018

 

18

 

68,100

 

46.7

%

 

 

 

8,096

 

 

7,889

 

 

207

 

 

10,061

Baltimore 1 (5)
1835 Washington Blvd

 

6/19/2017

11/20/2018

 

17

 

83,560

 

36.9

%

 

 

 

10,775

 

 

11,204

 

 

162

 

 

13,421

New Orleans
2705 Severn Ave

 

2/24/2017

12/21/2018

 

16

 

86,545

 

48.7

%

 

 

 

12,549

 

 

12,148

 

 

401

 

 

14,383

Philadelphia (5)(6)
550 Allendale Rd

 

3/30/2018

4/25/2019

 

12

 

69,930

 

37.9

%

 

 

 

14,338

 

 

11,536

 

 

3,264

 

 

11,807

Houston (6)
1050 Brittmoore Rd

 

3/1/2017

5/21/2019

 

11

 

131,845

 

18.6

%

 

 

 

14,825

 

 

14,825

 

 

 -

 

 

17,820

Stamford (5)
370 West Main St

 

3/15/2019

10/24/2019

 

6

 

38,650

 

19.5

%

 

 

 

2,904

 

 

3,115

 

 

 -

 

 

5,167

Kansas City
510 Southwest Blvd

 

5/23/2018

12/12/2019

 

5

 

76,822

 

15.6

%

 

 

 

9,968

 

 

8,423

 

 

1,545

 

 

9,750

Atlanta 7
2915 Webb Rd

 

5/15/2018

3/23/2020

 

1

 

73,972

 

1.7

%

 

 

 

9,418

 

 

6,923

 

 

2,495

 

 

8,045

Total Completed Development Investments

 

15

 

1,975,442

 

39.5

%

(7)

 

$

276,681

 

$

261,389

 

$

18,429

 

$

297,118

(1)

As of May 3, 2020.

(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)

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.

(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.

(8)

Subsequent to March 31, 2020, the Company purchased its partner’s 50.1% Profits Interest in these investments.

 

First Quarter 2020

Picture 7

 

14

 

JCAP Development Property Investments Under Construction, at Fair Value

As of March 31, 2020

(unaudited, dollars in thousands)

 

The COVID-19 pandemic could delay the estimated timing of completion of these projects, because many jurisdictions have shut down or delayed entitlement activities, and “shelter in place” orders could potentially delay construction activities. In addition, the COVID-19 pandemic could extend the timeframe for a newly developed facility to reach stabilized occupancies and cash flows. We continue to monitor our projects to ensure that they still meet our risk-adjusted yield expectations, and reduced project yield estimates due to the COVID-19 pandemic or other factors could result in the cancellation of these projects in the future.

 

Planned:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

 

Estimated

 

 

(MSA)

 

 

 

 

Funded

 

Unfunded

 

Fair

 

Size

 

Construction

 

C/O

Closing Date

 

Address

 

Commitment

 

Investment

 

Commitment

 

Value

 

(NRSF) (1)

 

Start Date

 

Quarter (3)

9/14/2017

 

Los Angeles 1
959 W Hyde Park Blvd

 

 

28,750

 

 

10,393

 

 

18,357

 

 

10,365

 

120,038

 

Q3 2020

 

Q3 2021

9/14/2017

 

Miami 1
4250 SW 8th St

 

 

14,657

 

 

13,417

 

 

1,240

 

 

14,215

 

69,555

 

Q2 2018

 

Q2 2020

11/16/2017

 

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

 

 

20,168

 

 

13,714

 

 

6,879

 

 

14,979

 

96,295

 

Q4 2018

 

Q2 2020

12/15/2017

 

New York City 4
6 Commerce Center Dr

 

 

10,591

 

 

7,705

 

 

2,886

 

 

8,835

 

78,325

 

Q2 2018

 

Q3 2020

6/12/2018

 

Los Angeles 2 (3)
7855 Haskell Ave

 

 

9,298

 

 

9,332

 

 

649

 

 

9,579

 

117,097

 

Q1 2020

 

Q2 2021

3/1/2019

 

New York City 6
435 Tompkins Ave

 

 

18,796

 

 

3,572

 

 

15,224

 

 

3,462

 

76,250

 

Q3 2020

 

Q3 2021

4/18/2019

 

New York City 7 (3)
14 Merrick Rd

 

 

23,462

 

 

9,823

 

 

13,827

 

 

9,451

 

95,331

 

Q3 2019

 

Q1 2021

5/8/2019

 

New York City 8 (3)
74 Bogart St

 

 

21,000

 

 

22,306

 

 

 -

 

 

22,384

 

193,763

 

Q4 2020

 

Q4 2021

7/11/2019

 

New York City 9 (3)
74-16 Grand Ave

 

 

13,095

 

 

13,751

 

 

 -

 

 

13,588

 

105,950

 

Q3 2020

 

Q2 2021

8/21/2019

 

New York City 10 (3)
1401 4th Ave

 

 

8,674

 

 

9,041

 

 

 -

 

 

8,933

 

76,775

 

Q3 2019

 

Q2 2021

Total Development Investments in Progress

 

$

168,491

 

$

113,054

 

$

59,062

 

$

115,791

 

1,029,379

 

 

 

 

(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 March  31, 2020 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.

 

To date, we have re-assessed five development projects for which either development or construction has not yet commenced and communicated our intent to forgo those projects with the respective developers. The aggregate committed principal amount of the five investments is approximately $56.6 million with an outstanding principal of $15.7 million as of March 31, 2020. We and our respective developer partners on these investments are in active dialogues concerning the repayment of our outstanding principal along with any current and future accrued interest, but, more importantly, we are no longer obligated to fund the balance of those commitments, which positively affects our liquidity.

 

Forgone:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

Location

 

Original

 

 

 

 

Unfunded

 

 

 

 

 

(MSA)

 

Investment

 

Funded

 

Original

 

Fair

Closing Date

 

Address

 

Commitment

 

Investment

 

Commitment (2)

 

Value

10/12/2017

 

Miami 2 (1)
880 W Prospect Rd

 

 

9,459

 

 

1,528

 

 

8,023

 

 

1,287

10/30/2017

 

New York City 3 (1)
5203 Kennedy Blvd

 

 

15,301

 

 

6,932

 

 

8,717

 

 

6,426

12/27/2017

 

Boston 3
19 Coolidge Hill Rd

 

 

10,174

 

 

2,805

 

 

7,369

 

 

2,683

5/1/2018

 

Miami 9 (1)
10651 W Okeechobee Rd

 

 

12,421

 

 

3,642

 

 

8,951

 

 

3,424

11/16/2018

 

Baltimore 2
8179 Ritchie Hwy

 

 

9,247

 

 

770

 

 

8,477

 

 

706

Total Forgone Investments

 

$

56,602

 

$

15,677

 

$

41,537

 

$

14,526

(1)

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

(2)

We expect minimal additional fundings on these investments as we and our respective developer partners are in active dialogues concerning the repayment of our outstanding principal along with any current and future accrued interest.

 

 

First Quarter 2020

Picture 7

 

15

 

JCAP Development Property Investments in Heitman Joint Venture

As of March  31, 2020

(unaudited, dollars in thousands)

 

JV Owned Properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(MSA)

 

Date

 

Date

 

Size

 

Months

 

% Physical

 

JV Capital

 

Address

 

Opened

 

Acquired

 

(NRSF) (1)

 

Open (2)

 

Occupancy (2)

 

Investment (3)

 

Jacksonville
3211 San Pablo Rd S

 

7/26/2017

 

1/28/2019

 

80,621

 

33

 

87.1

%

 

$

12,564

 

Atlanta 2
11220 Medlock Bridge Rd

 

9/14/2017

 

1/28/2019

 

70,089

 

32

 

78.2

%

 

 

10,079

 

Denver
2255 E 104th Ave

 

12/14/2017

 

1/28/2019

 

85,500

 

29

 

65.9

%

 

 

13,899

 

Atlanta 1
1801 Savoy Dr

 

4/12/2018

 

1/28/2019

 

71,147

 

25

 

60.6

%

 

 

11,770

 

Raleigh
7710 Alexander Town Blvd

 

6/8/2018

 

11/7/2019

 

64,108

 

23

 

62.9

%

 

 

8,945

 

Total Owned Properties

 

 

 

371,465

 

28

 

71.3

%

 

$

57,257

(4)

(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)

As of May 3, 2020.

(3)

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.

(4)

Average weighted based on NRSF.

 

Development Projects Completed (all open and operating, at fair value):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

(MSA)

 

Investment

 

Date

Months

 

Size

 

% Physical

 

 

 

 

Funded

 

Unfunded

 

Fair

Address

 

Date

 

Opened

Open(1)

 

(NRSF)(2)

 

Occupancy(1)

 

Commitment

 

Investment

 

Commitment(3)

 

Value

Columbia
401 Hampton St

 

9/28/2016

 

8/23/2017

32

 

70,935

 

79.2

%

 

 

$

9,199

 

$

9,073

 

$

126

 

$

10,199

Washington DC (4)
1325 Kenilworth Ave NE

 

4/15/2016

 

9/25/2017

31

 

90,405

 

74.6

%

 

 

 

 -

 

 

 -

 

 

 -

 

 

3,795

Miami 1 (4)
490 NW 36th St

 

5/14/2015

 

2/23/2018

26

 

75,770

 

73.5

%

 

 

 

 -

 

 

 -

 

 

 -

 

 

1,608

Fort Lauderdale (4)
812 NW 1st St

 

9/25/2015

 

7/26/2018

21

 

87,384

 

73.3

%

 

 

 

 -

 

 

 -

 

 

 -

 

 

4,884

Miami 2 (4)
1100 NE 79th St

 

5/14/2015

 

10/30/2018

18

 

73,890

 

76.2

%

 

 

 

 -

 

 

 -

 

 

 -

 

 

1,661

New Jersey
6 Central Ave

 

7/21/2016

 

1/24/2019

15

 

59,110

 

56.7

%

 

 

 

7,828

 

 

7,429

 

 

399

 

 

8,559

Total Completed Development Investments

24

 

457,494

 

72.8

%

(5)

 

$

17,027

 

$

16,502

 

$

525

 

$

30,706

(1)

As of May 3, 2020.

(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)

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.

(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.

 

 

 

First Quarter 2020

Picture 7

 

16

 

Summary of Investments

As of March 31, 2020

 

Picture 2

 

*Other markets include MSAs comprising of 2% (Baltimore, Charlotte, 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
(in thousands)

On-balance sheet

 

 

 

 

 

 

 

 

 

 

 

Wholly Owned Assets

24

 

24

 

0

 

1,841,876

 

$

341,452

 

Development Property Investments

36

 

26

 

10

 

3,004,821

 

$

445,172

 

Forgone Investments

5

 

0

 

0

 

0

 

$

56,602

Joint Venture

 

 

 

 

 

 

 

 

 

 

 

Wholly Owned Assets

5

 

5

 

0

 

371,465

 

$

5,726

 

Development Property Investments

6

 

6

 

0

 

457,494

 

$

1,703

 

First Quarter 2020

Picture 7

 

17

 

Capital Sources and Investment Uses

As of March  31, 2020

(dollars in millions)

 

 

 

Estimated Capital to be Used in Investing Activities (1)

 

 

Contractual investment obligations:

 

 

Development property investments (2)

$

119

Less: Forgone investments

 

(42)

Total to Fund Investments

$

77

 

 

 

 

 

 

Known/Committed Capital Sources

 

 

Cash and cash equivalents as of March 31, 2020

$

 7

Current net borrowing base capacity under credit facility (3)

 

52

Total Known/Committed Sources

$

59

 

 

 

Estimated Additional Sources of Capital

 

 

Borrowing base additions under credit facility - within one year (3)

$

30 - 60

Repayments on forgone investments

 

16

Issuance of common stock under ATM (remaining ATM availability)

 

81

Repayments/refinancings of existing JCAP mortgages - within one year

 

15 - 25

Total Additional Sources

$

142 - 182

(1)

Does not include financing spend or operating cash flow.

(2)

Includes non-cash interest reserves of approximately $26 million.

(3)

As of March  31, 2020,  the Company had $51.6 million of net borrowing base capacity under the Credit Facility after considering the $198.0 million outstanding. We expect the borrowing base capacity to increase by $30 - $60 million by March 31, 2021 as additional assets are added and assets are transferred within the borrowing base to wholly-owned collateral tranches.

 

Timing of Funding $77 million of Committed Development Property Investments (1) 

 

Picture 1

 

(1)

Includes non-cash interest reserves of approximately $22 million.

 

JCAP Capital Structure as a Percentage of Total Assets

Picture 2

 

First Quarter 2020

Picture 7

 

18

 

Debt Maturities

As of March 31, 2020

(dollars in thousands)

Picture 9

 

 

The following schedule depicts the impact of interest rate swaps and interest rate caps on our debt as of March 31, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Venture Level

 

Company's Portion

 

Debt Maturity Date

 

 

Effective Interest Rate Prior to Hedging

 

Effective Interest Rate After Hedging

 

Hedge Effective Date

 

Hedge Maturity Date

Secured revolving credit facility(1)

 

n/a

 

$

198,000

 

3/24/2023

 

 

4.33

%

 

4.33

%

 

(1)

 

(1)

Term loans 1-4

 

n/a

 

 

34,088

 

8/1/2021

 

 

3.83

%

 

4.54

%

 

6/3/2019

 

8/1/2021

Term loan 5

 

n/a

 

 

7,087

 

8/1/2021

 

 

3.83

%

 

3.85

%

 

8/13/2019

 

8/1/2021

Total Jernigan Capital Inc. before SL1 (% represent Weighted Average)

 

 

 

 

239,175

 

 

 

 

4.24

%

 

4.34

%

 

 

 

 

SL1 Term Loan

 

36,087

 

 

3,609

 

2/27/2022

 

 

3.73

%

 

4.44

%

 

4/1/2019

 

4/1/2021

SL1 Term Loan 2

 

3,250

 

 

325

 

2/27/2022

 

 

3.73

%

 

3.73

%

 

 

 

 

Total Debt

$

39,337

 

$

243,109

 

 

 

 

4.23

%

 

4.34

%

 

 

 

 

(1)

In May 2020, we entered into a $100 million interest rate swap with an effective rate of 0.36% and a $100 million interest rate cap with a strike price of 0.50% on the Secured revolving credit facility. Both interest rate instruments mature March 24, 2023. The facility is also subject to a $100 million interest rate cap with a strike price of 2.50% effective June 25, 2019 and a $20 million interest rate cap with a strike price of 1.50% effective March 18, 2020. Both of those interest rate caps mature December 28, 2021.  With these contracts in place, we have locked in a maximum cost of debt on $200 million of debt capital at approximately 3.1%, which we anticipate will decrease as investments underlying the borrowing base mature.

 

The terms of our Credit Facility contain certain financial covenants including the following:

 

 

 

 

 

 

 

 

 

Covenant Requirement as of March 31, 2020

 

 

Actual as of March 31, 2020

Total Leverage

 

≤ 45.0%

 

 

33.50%

Fixed Charge Coverage

 

≥ 1.15x

 

 

1.32x

Debt Service Coverage

 

≥ 2.00x

 

 

2.89x

Min Net Worth

 

$360.5M

 

 

$487.2M

Min Liquidity

 

$25M

 

 

$58.9M

Min Borrowing Base # assets

 

25

 

 

37

Min Borrowing Base % of assets in Tranche B & C

 

20%

 

 

61%

 

 

 

 

 

 

 

First Quarter 2020

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

 

 

 

John A. Good

 

Jonathan Perry

Chairman and Chief Executive Officer

 

President and Chief Investment Officer

 

 

 

Kelly P. Luttrell

 

David Corak

Senior Vice President, Chief Financial Officer, Treasurer and

 

Senior Vice President of Corporate Finance

Corporate Secretary

 

 

 

 

 

Billy Perry

 

 

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.

 

 

First Quarter 2020

Picture 7

 

20

 

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