Jernigan Capital — Investor Presentation (March 2016)
25 slides from Jernigan Capital's investor presentation, Mar 8, 2016
Slide 1: Investor Presentation
1 Investor Presentation Exhibit 99.1
Slide 2: Disclaimer: Forward-Looking Statements
2 Disclaimer Forward - Looking Statements This presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including statements regarding our future performance, our 2016 earnings guidance and rela
Slide 3: Table of Contents
3 Table of Contents SECTION 1 | Company Overview SECTION 2 | How We Operate SECTION 3 | Our Current Portfolio SECTION 4 | Sector Ripe For JCAP’s Investment Strategy SECTION 5 | Recent Developments
Slide 4: Company Overview
4 Company Overview
Slide 5: About Jernigan Capital
5 About Jernigan Capital Jernigan Capital, Inc. (NYSE: JCAP) is a New York Stock Exchange - listed REIT that primarily invests in self - storage development projects in major markets and, secondarily makes first mortgage acquisition and refinancing loans on operating self - storage facilities . Sinc
Slide 6: JCAP Mission Statement
6 JCAP Mission Statement To be the preeminent capital partner to self - storage entrepreneurs nationwide by offering creative solutions through an experienced team demonstrating the highest levels of integrity, dedication, excellence, and community, while maximizing shareholder value.
Slide 7: Investment Focus and Experienced, Aligned Management
7 » $175.7 million of closed loans with additional $600+ million pipeline » Sourced primarily through long - time industry relationships and reputations of management » Development activity increasing in sector starved for new supply » JCAP obtains ROFRs on all development investments, providing cle
Slide 8: Management Team
8 2006 - 2013: CEO of CubeSmart 1995 - 2002: Member of NAREIT’s Board of Governors Management Team Key Members Background Dean Jernigan President and Chief Executive Officer ▪ 30+ years of experience ▪ CEO of CubeSmart from 2006 to 2013 ▪ Chairman and CEO of Storage USA from 1984 to 2002 ▪ Member of
Slide 9: How We Operate
9 How We Operate
Slide 10: We Are Not A Typical Mortgage REIT
10 We Are 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 par
Slide 11: Investment Strategy / Target Investments
11 Investment Strategy / Target Investments Opportunistic (33% of Current) C/O take - out Acquisitions Refinancing Development (67% of Current; 95%+ of Pipeline) Ground - up construction Major redevelopment ₋ Up to 90% LTC ₋ 4 - 6 year term ₋ 6.9% coupon + 50% profit interest ₋ 10 - 20% funded at or
Slide 12: Conservative Underwriting and Expert Processing/Servicing
12 Conservative Underwriting and Expert Processing/Servicing » Conservative underwriting by management team with many years of experience ▪ Significant operating and interest reserves built into each project ▪ Developer equity funded up front ▪ Significant input from CUBE and other property managers
Slide 13: Underwriting Selection
13 Underwriting Selection $1 billion + Loans reviewed $400 million Term sheets issued $285 million Signed Term Sheets $175.7 million Closed Loans JCAP uses a stringent underwriting process based on management’s extensive experience and successful track record underwriting self - storage properties a
Slide 14: Underwriting Timeline: Prospect to Closed Loan
14 Underwriting Timeline Prospect to Closed Loan 4 months Facility Construction ($10 million total cost) 14 months Lease - up period 2.5 years Certificate of Occupancy (~$12.0 million estimated value) Loan Origination Stabilization (~$15 million estimated value) Construction Start Stabilization ~3
Slide 15: Our Current Portfolio
15 Our Current Portfolio
Slide 16: Closed Loan Geography
16 West Palm Beach Fort Lauderdale Miami Closed Loan Geography Atlanta (Alpharetta, Marietta) Development Market Stabilized Asset Market Current Markets Charlotte Orlando (Ocoee) New Orleans (Mandeville) Tampa (Riverview) Milwaukee Pittsburgh New Haven Austin (Round Rock) Sacramento Raleigh Jacksonv
Slide 17: Sector Ripe for JCAP's Investment Strategy
17 Sector Ripe for JCAP’s Investment Strategy
Slide 18: Current Self-Storage Market Opportunity
18 Current Self - Storage Market Opportunity Excellent Self - Storage Industry Fundamentals Significant Borrower Demand Lack of Adequate Financing Attractive Opportunity for JCAP
Slide 19: Industry Leading Fundamentals
19 Industry Leading Fundamentals NOI Growth Occupancy » Self - storage total returns during the last ten years have been 4 times greater than the MSCI US REIT Index (RMS) » Industry is essentially full (91 - 94% occupied) and driving premium (8 - 11 %) same store NOI growth » Public REITs have predo
Slide 20: 5 Years of Dramatic Undersupply
20 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 As % of Existing Supply New Square Footage (000s) New Square Footage Completions As a % of Existing Supply Development Loan Opportunity New
Slide 21: Self-Storage Stabilized Asset Funding Opportunity
21 $0 $500 $1,000 $1,500 $2,000 $2,500 2015 2016 2017 Self Storage Maturing Loans in Millions Self Storage Loans maturing Self - Storage Stabilized Asset Funding Opportunity Transaction Volume - Nationwide CMBS Maturing Loans » Complementary multi - billion dollar opportunities in both acquisition a
Slide 22: Recent Developments
22 Recent Developments
Slide 23: Capitalization: Joint Venture with Heitman Capital Management
23 Capitalization » Joint Venture with Heitman Capital Management ▪ $122.2 million venture – 90% Heitman ($110 million assuming procurement of $75 million institutional co - investment currently in progress; $41.9 million if no co - investment is procured) and 10% JCAP ($12.2 million) ▪ Includes thr
Slide 24: 2016 Earnings Guidance
24 2016 Earnings Guidance » Revenues increasing as capital is deployed ▪ Interest income of $6.0 million to $6.5 million ▪ Income from Heitman Joint Venture of $1.2 million to $1.3 million ▪ Total income of $7.2 million to $7.8 million » Stabilized G&A spread across increasing assets ▪ Total G&A of
Slide 25: Non-GAAP Financial Measures and Reconciliations
25 Non - GAAP Financial Measures and Reconciliations Non - GAAP Financial Measures Adjusted Earnings is a non - GAAP measure and is defined as net income plus stock - based compensation expense, and Adjusted Cash Earnings is a non - GAAP measure and is defined as Adjusted Earnings reduced by unreali
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