Jernigan Capital — Investor Presentation (September 2017)
26 slides from Jernigan Capital's investor presentation, Sep 19, 2017
Slide 1: Investor Presentation September 2017
1 Investor Presentation September 2017
Slide 2: Safe Harbor Disclosure Regarding Forward-Looking Statements
2 Safe 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 Sect ion 21E of the Securities Exchange Act of 1934 and other federal securities laws, including statements re
Slide 3: Company mission and overview
3 March 2017 provides debt and equity capital to private developers, owners, and operators of self - storage facilities. Our mission is to be the preeminent capital partner for self - storage entrepreneurs nationwide by offering creative solutions through an experienced team demonstrating the highes
Slide 4: Investment Highlights
4 ▪ $775+ million pipeline working through underwriting, principally from long - term relationships ▪ Closed $296.2 million of new development investments in 2017 as of September 18, 2017 ▪ Entire pipeline is comprised of development investments Significant Identified Growth Opportunities Investment
Slide 5: Experienced and Aligned Senior Management Team
5 Experienced and Aligned Senior Management Team ~8.5% Management and Board Ownership Creates Significant Alignment of Interests Dean Jernigan Chairman of the Board & Chief Executive Officer John Good President & Chief Operating Officer Kelly Luttrell Senior Vice President & Chief Financial Officer
Slide 6: Attractive Investment Thesis
6 Experienced Senior Management Team with Significant Ownership Significant Identified Growth Opportunities Compelling Investment Economics Flexible Capital Structure and Attractive Valuation High Quality Platform with Demonstrated Expertise Attractive Investment Thesis High ROI Investment Opportuni
Slide 7: High ROI Business Model Executed in Top Self-Storage Markets
7 ▪ Primary focus on programmatic self - storage development in top - tier markets ▪ Seek experienced developers looking for a reliable and fair capital partner – High character, financial stability and proven track record for picking great sites – Known to JCAP management – Loyalty High ROI Busines
Slide 8: Selective Underwriting
8 Selective Underwriting $8.7 billion Investments Reviewed $1.1 billion Term Sheets Issued $852 million Signed Term Sheets $589 million (~7% of Evaluated) Closed Investments* Stringent Underwriting Process Based on Management’s Extensive Experience and Successful Track Record Investing in Self - Sto
Slide 9: Attractive Investment Portfolio
9 Attractive Investment Portfolio % Wholly - Owned / % Joint Venture Status of Development Investments (3) ▪ Development investments: Certificate of Occupancy (“C/O”) LTV 68%, Stabilized LTV 53% ▪ Development investments currently represent 96% of investment portfolio ▪ Wholly - owned portfolio will
Slide 10: High Quality Self-Storage Properties Located in Attractive Markets
10 High Quality Self - Storage Properties Located in Attractive Markets Geographic Diversification Notes: Percentages and Company’s market average are weighted based on committed total investment amounts (1) Other markets include Austin, Chicago, Columbia, Fort Lauderdale, Houston , Louisville , Mil
Slide 11: Jacksonville, FL Case Study - Ground Up Development
11 Jacksonville, FL Case Study - Ground Up Development Initial Underwriting Current Expectations Est. Cost to Build $7,160,880 $7,160,880 Development Yield 8.8% 10.0% Length of Construction 14 months 11 months Length to Stabilization 36 months 26 months C/O Value $7,836,278 $10,209,301 Stabilized Ca
Slide 12: Atlanta, GA Case Study - Conversion of Industrial Warehouse
12 ▪ Multi - story climate controlled facility totaling 66,332 NRSF ▪ Investment originated in June 2015; C/O achieved May 2016 ▪ Located directly off of Interstate 75 which is a major north - south interstate that runs through six states ▪ 226,000 cars pass the site daily on Interstate 75 ▪ 3 - mil
Slide 13: Underwriting Track Record
13 Underwriting Track Record Austin Orlando 1 Atlanta 1 Atlanta 2 ▪ Faster lease - up ▪ Higher occupancy and income Consistent Outperformance Relative to Underwriting New Haven (1) Months open and physical occupancy as of 9/17/17 (2) Orlando 1 (54,435 NRSF including office space) was at 86.2% physic
Slide 14: Current Investment Pipeline
14 ▪ As of September 18, 2017, executed term sheets for investments in 16 separate self - storage development projects for an aggregate capital commitment of approximately $261 million ▪ Maintain a robust $775+ million pipeline of additional development investment opportunities in top 50 U.S. market
Slide 15: Recent Developments
15 Recent Developments Closed investments since June 30, 2017 Jacksonville 3 ▪ $8.1 million investment in Jacksonville, FL in July 2017 ▪ M ulti - story , climate controlled facility with 749 units totaling 68,700 net rentable square feet (“NRSF”) ▪ Ground - up project located on Edison Ave visible
Slide 16: Recent Developments - continued
16 Recent Developments - continued Credit Facility ▪ In July 2017, the Company obtained a secured credit facility for up to $100 million of attractively priced debt capital, led by KeyBank Capital Markets, Inc. and Raymond James Bank, N.A. ▪ Expandable up to $200 million with accordion feature, upon
Slide 17: Appendix
17 Appendix
Slide 18: Portfolio Detail
18 Portfolio Detail Note: Represents portfolio as of 6/30/2017 (1) Represents principal balance of loan gross of origination fees (2) In February 2017, the Company purchased, for $1.3 million, 50% of the economic rights of the Class A membership units of the lim ite d liability company which owns Or
Slide 19: Portfolio Detail - Continued
19 Portfolio Detail - Continued (1) Note: Represents portfolio as of 6/30/2017 (1) Represents principal balance of loan gross of origination fees (2) These investments contain a higher loan - to - cost ratio and a higher interest rate, some of which interest is payment - in - kind ("PI K") interest.
Slide 20: Portfolio Detail - Continued
20 Portfolio Detail - Continued Note: Represents portfolio as of 6/30/2017 (1) Represents principal balance of loan gross of origination fees (2) Total represents portfolio as of 6/30/17 plus investments closed from 7/1/2017 - 9/18/2017 (3) Total represents total from footnote (2) subtracting out th
Slide 21: Underwriting Timeline
21 Underwriting Timeline Prospect to Closed Investment 4 months Facility Construction ($10.0 million total cost) 14 months Lease - up period 3 years Certificate of Occupancy (~$13.2 million estimated value) Investment Origination Stabilization (~$16.8 million estimated value) Construction Start ; St
Slide 22: Not A Typical Mortgage REIT
22 Not A Typical Mortgage REIT Typical Mortgage REIT ▪ Higher corporate leverage, including leverage of junior debt ▪ No equity participation ▪ Structured finance arbitrage rather than property focus Jernigan Capital ▪ Low corporate leverage ▪ Equity participations that allow investors to participat
Slide 23: Conservative Underwriting and Expert Processing / Servicing
23 ▪ Underwriting performed by management team with many years of experience using data - driven, submarket focused approach ▪ Significant operating and interest reserves built into each project and portion of developer fee deferred ▪ Significant input from third party managers on unit mix and proje
Slide 24: Business Plan and Investments are Even More Attractive Today than at IPO
24 Business Plan and Investments are Even More Attractive Today than at the Time of IPO Impressive Results Since IPO Key Metrics Considered at IPO Current Market Conditions Investment Opportunity Pipeline of attractive development investments s ignificantly greater than anticipated at IPO Developmen
Slide 25: Highland Capital Series A Preferred Overview
25 Highland Capital Series A Preferred Overview ▪ On July 27, 2016, Jernigan Capital entered into an agreement with NexPoint Advisors, L.P., an affiliate of Highland Capital Management, LP, to issue up to $125 million of Series A Preferred Stock Investor Funds managed by NexPoint Advisors, L.P. Stru
Slide 26: Heitman Capital Management Joint Venture Overview
26 Heitman Capital Management Joint Venture Overview ▪ On March 7, 2016, Jernigan Capital, through its operating company, entered into a limited liability company agreement to form a real estate venture (“JV”) partnership with an investment vehicle of Heitman Capital Management for an initial total
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