Jernigan Capital — Investor Presentation (January 2019)
31 slides from Jernigan Capital's investor presentation, Jan 8, 2019
Slide 1: Investor Presentation
November 2018 Investor Presentation INVESTOR PRESENTATION JERNIGAN CAPITAL 6410 Poplar Ave, Suite 650 Memphis, TN 38119
Slide 2: Safe Harbor Disclosure Regarding Forward-Looking Statements
November 2018 Investor PresentationSAFE HARBOR DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and other federal securities l
Slide 3: Introduction: Our Mission
November 2018 Investor PresentationINTRODUCTION January 2019 Investor Presentation OUR MISSION OUR TICKER SYMBOL Jernigan Capital provides debt and equity capital to private developers, owners and operators of self-storage facilities with a view to eventual outright ownership of facilities we financ
Slide 4: Recent Events
November 2018 Investor PresentationRecent Events (1) The accordion feature is subject to certain conditions including obtaining additional commitments from lenders. The following events occurred during the quarter ending 12/31/2018: 4 .. 11/20/2018: The Company closed on a development investment wit
Slide 5: Investment highlights and growth opportunities
November 2018 Investor Presentation .. $370+ million pipeline of investments in underwriting .. Increasing short-term opportunity to acquire full ownership of existing projects as 2017 investments are completed and lease up .. Bridge and other creative financing structures provide additional acquisi
Slide 6: Experienced and Aligned Senior Management Team
November 2018 Investor PresentationEXPERIENCED AND ALIGNED SENIOR MANAGEMENT TEAM ~8.0% Management and Board Ownership Creates Significant Alignment of Interests ~8.0% MANAGEMENT AND BOARD OWNERSHIP CREATES SIGNIFICANT ALIGNMENT OF INTERESTS .. 32+ years in the self- storage industry .. Invested ove
Slide 7: JCAP's Competitive Advantage
November 2018 Investor PresentationJCAP’S COMPETITIVE ADVANTAGE ACCESSIBLE JCAP CAPITAL vs. COMMERICAL BANKS’ RETREAT FROM SELF-STORAGE CONSTRUCTION LENDING .. Continued post-recession hangover of commercial banks diminishes appetite for self-storage construction loans .. Regulatory hurdles diminish
Slide 8: High ROI Business Model Executed in Top Self-Storage Markets
November 2018 Investor PresentationHIGH ROI BUSINESS MODEL EXECUTED IN TOP SELF-STORAGE MARKETS ATTRACTIVE RISK-ADJUSTED RETURNS THROUGH EQUITY PARTICIPATION DEVELOPMENT INVESTMENTS Ground-up Construction | Major Redevelopment .. Focus on programmatic self-storage development of Generation V facilit
Slide 9: Development Project Investment Timeline
November 2018 Investor PresentationDEVELOPMENT PROJECT INVESTMENT TIMELINE (1) Projected IRR range assumes the following: 3 to 5 year lease-up period, a 9.0% development yield, a 5.5% exit cap rate and a sale at stabilization. | (2) Value at construction completion estimate based on a 150bp spread t
Slide 10: Predictable Dividend That Tracks Value Creation
November 2018 Investor Presentation 0.5x 2.5x 2.4x 1.5x 0.4x 1.4x 0.8x 0.5x 0.3x 1.1x 1.6x 1.3x 1.4x 1.6x 2.8x 2.6x 2.0x 0.6x 1.6x 1.0x 0.7x 1.0x 1.8x 2.1x 1.8x 2.0x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 1Q16-3Q18 2018E EPS Coverage AEPS Coverage P
Slide 11: Underwriting Track Record – Facilities Open More Than 1 Year
November 2018 Investor PresentationUNDERWRITING TRACK RECORD – FACILITIES OPEN MORE THAN 1 YEAR Note: (H) denotes a facility that is part of our Heitman JV. | (1) Months open and physical occupancy as of 12/31/18. | (2) Orlando 1 (51,235 NRSF) was at 86.2% physical occupancy on 7/18/17. On 7/19/17 a
Slide 12: Underwriting Track Record – Facilities Open 6 Months to 1 Year
November 2018 Investor PresentationUNDERWRITING TRACK RECORD – FACILITIES OPEN BETWEEN 6 MONTHS AND 1 YEAR Note: (H) denotes a facility that is part of our Heitman JV. | (1) Months open and physical occupancy as of 12/31/18. DENVER (H) | 2225 E 104th Ave Northglenn, CO 80233 AVERAGE (ALL FACILITIES)
Slide 13: High Quality Self-Storage Properties in Attractive Markets
November 2018 Investor PresentationHIGH QUALITY SELF-STORAGE PROPERTIES LOCATED IN ATTRACTIVE MARKETS Note: Percentages and Company’s market average are weighted based on committed total investment amounts. | (1) Source: Census Bureau. | (2) Other markets include Austin, Baltimore, Charlotte, Chicag
Slide 14: Current Portfolio and Investment Pipeline
November 2018 Investor Presentation 14 CURRENT PORTFOLIO AND INVESTMENT PIPELINE Note: As of 10/31/2018. Boston Los Angeles Development Markets Existing Markets Existing Markets & Pipeline Pipeline Washington, DCKansas City New Haven-Bridgeport Seattle New York City – Northern NJ Philadelphia Tampa
Slide 15: Business Model Proven from Origination to Acquisition
November 2018 Investor PresentationBUSINESS MODEL PROVEN FROM ORIGINATION TO ACQUISITION (1) Funded principal balance of the loan (net of unamortized origination fees) as of the date of acquisition. | (2) Represents cash consideration (inclusive of transaction costs), assumed liabilities, and net pr
Slide 16: Wholly-Owned Properties
November 2018 Investor PresentationWHOLLY-OWNED PROPERTIES (1) Net operating income (NOI) is a non- GAAP financial measure that excludes from operating income the impact of depreciation and general and administrative expense. Projected stabilized NOI represents NOI at an expected time in the future
Slide 17: Bridge Recapitalization
November 2018 Investor PresentationBRIDGE RECAPITALIZATION (1) The two projects under construction will each also pay a $1 million preferred return to the developer after payment to JCAP of the PIK interest and before the 49.9% profits interest split. | (2) Physical occupancy as of 12/31/2018. INVES
Slide 18: JCAP Capital Sources and Investment Uses
November 2018 Investor PresentationJCAP CAPITAL SOURCES AND INVESTMENT USES (1) Does not include financing spend, positive operating cash flow or any additional purchases of developers’ interest. | (2) Includes ~$9 million development commitment closed in November 2018. | (3) Assumes increase in the
Slide 19: Contact Jernigan Capital
November 2018 Investor PresentationCONTACT JERNIGAN CAPITAL JERNIGAN CAPITAL, INC [email protected] 6410 Poplar Ave, Suite 650 Memphis, TN 38119 www.jernigancapital.com 19 January 2019 Investor Presentation
Slide 20: Appendix
November 2018 Investor Presentation APPENDIX
Slide 21: Portfolio Detail
November 2018 Investor PresentationPORTFOLIO DETAIL Note: Represents portfolio as of 9/30/2018. | (1) Cash 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 ne
Slide 22: Portfolio Detail – Continued
November 2018 Investor PresentationPORTFOLIO DETAIL – CONTINUED 22 Note: Represents portfolio as of 9/30/2018. | (1) Represents principal balance of loan gross of origination fees. | (2) Construction at the facility was substantially complete and/or certificate of occupancy had been received as of 9
Slide 23: Portfolio Detail – Continued
November 2018 Investor PresentationPORTFOLIO DETAIL – CONTINUED 23 Note: Represents portfolio as of 9/30/2018. | (1) Represents principal balance of loan gross of origination fees. | (2) Construction at the facility was substantially complete and/or certificate of occupancy had been received as of 9
Slide 24: Portfolio Detail – Continued
November 2018 Investor PresentationPORTFOLIO DETAIL – CONTINUED 24 Note: Represents portfolio as of 9/30/2018. | (1) Represents principal balance of loan gross of origination fees. | (2) Construction at the facility was substantially complete and/or certificate of occupancy had been received as of 9
Slide 25: Portfolio Detail – Continued
November 2018 Investor PresentationPORTFOLIO DETAIL – CONTINUED Note: Represents portfolio as of 9/30/2018. | (1) Represents principal balance of loan gross of origination fees. | (2) Construction at the facility was substantially complete and/or certificate of occupancy had been received as of 9/30
Slide 26: JCAP Is an Equity REIT, Not a Mortgage REIT
November 2018 Investor PresentationJCAP IS AN EQUITY REIT, NOT A MORTGAGE REIT TYPICAL MORTGAGE REIT .. Higher corporate leverage, including leverage of junior debt .. No equity participation .. Structured finance arbitrage rather than property focus .. Communication with borrowers only when problem
Slide 27: Heitman Capital Management Joint Venture Overview
November 2018 Investor PresentationHEITMAN CAPITAL MANAGEMENT JOINT VENTURE OVERVIEW HEITMAN JOINT VENTURE IS FULLY COMMITTED JV Partner Heitman Capital Management LLC Initial Investment Structure 90% Heitman / 10% JCAP Maximum and Current JV Commitment $123.3 million (Fully Committed) JCAP Fee Over
Slide 28: Highland Capital Series A Preferred Overview
November 2018 Investor PresentationHIGHLAND CAPITAL SERIES A PREFERRED OVERVIEW Investor Funds managed by NexPoint Advisors, L.P. Structure of the Investment Series A Preferred Stock Investment Size Up to $125 million of equity capital through September 2018 Current Balance $125 million as of Octobe
Slide 29: Term Loans Overview
November 2018 Investor PresentationTERM LOANS OVERVIEW Lender FirstBank Structure of the Investment Secured by first mortgages on three of JCAP’s wholly-owned self-storage facilities Investment Size $24.9 million Term Three years, expiring August 1, 2021 Cost of Capital Interest at floating variable
Slide 30: Series B Preferred Stock Overview
November 2018 Investor PresentationSERIES B PREFERRED STOCK OVERVIEW NYSE Symbol JCAP-PB Structure of the Investment Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share with a liquidation preference of $25.00 per share; current market price of $24.95 per share Current
Slide 31: Credit Facility Overview
November 2018 Investor PresentationCREDIT FACILITY OVERVIEW Lead Lenders / Arrangers KeyBank Capital Markets, Inc., Raymond James Bank, N.A. and BMO Harris Bank N.A. Structure of the Investment Senior secured revolving credit facility Investment Size Up to $235 million debt capital, expandable up to
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