Jernigan Capital — Investor Presentation (March 2017)
26 slides from Jernigan Capital's investor presentation, Mar 6, 2017
Slide 1: Investor Presentation March 2017
1 Investor Presentation March 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 Section 21E of the Securities Exchange Act of 1934 and other federal securities laws, including statements reg
Slide 3: Company overview and mission
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 ▪ $800 million pipeline working through underwriting, principally from long - term relationships ▪ Closed $105.6 million of new development investments in 2017 ▪ Entire pipeline is comprised of development investments Significant Identified Growth Opportunities Investment Highlights Robust Self -
Slide 5: Providing Innovative Loan Financing Solutions for the Self-Storage Industry
5 ▪ 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 6: Selective Underwriting
6 Selective Underwriting $6.7 billion Investments Reviewed $804 million Term Sheets Issued $548 million Signed Term Sheets $398 million (~6% of Evaluated) Closed Investments Stringent Underwriting Process Based on Management’s Extensive Experience and Successful Track Record Investing in Self - Stor
Slide 7: Underwriting Track Record
7 Underwriting Track Record Tampa, FL Orlando, FL Atlanta, GA Atlanta, GA ▪ Faster lease - up ▪ Higher occupancy and income Consistent Outperformance R elative to Underwriting Commitment Date MSA Date Opened Days Open Current Physical Occupancy Year 1 UW Occupancy 6/19/2015 Tampa 4/11/2016 325 75.6%
Slide 8: Attractive Investment Portfolio
8 Wholly Owned 67% Joint Venture 33% Development 89% Construction (C/O takeout ) 8% Operating Property 3% Attractive Investment Portfolio Investments by Type (4) % Wholly - Owned / % Joint Venture Status of Development Investments (5) ▪ Development investments currently represent ~89% of investment
Slide 9: High Quality Self-Storage Properties Located in Attractive Markets
9 High Quality Self - Storage Properties Located in Attractive Markets Investments by Geography Square Footage Per Capita Source: Self - Storage Almanac Notes: Percentages and Company’s market average are weighted based on committed total investment amounts Other geographies include Washington DC, N
Slide 10: Jacksonville, FL Case Study – Ground Up Development
10 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 of Lease Up 36 months 26 months C/O Value $7,836,278 $10,209,301 Stabilized Cap Rat
Slide 11: Atlanta, GA Case Study – Conversion of Industrial Warehouse
11 ▪ Multi - story climate controlled facility totaling 66,332 net rentable square feet ▪ 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 ▪ 226,580 cars pass the site daily on Int
Slide 12: Recent Developments
12 ▪ February: $17.5 million development investment commitment for a 1,104 unit facility in the affluent Buckhead submarket at the junction of I - 75 and I - 85 ▪ Construction on the new facility is expected to commence in August 2017 and targeted for completion in 3Q 2018 ▪ Storage Development Part
Slide 13: Current Investment Pipeline
13 Development Markets Executed Term Sheet and Pipeline Executed Term Sheet Pipeline ▪ Executed term sheets for investments in 14 separate self - storage development projects for an aggregate capital commitment of approximately $150 million, eleven of which are expected to close by Q2 2017 ▪ Maintai
Slide 14: Compelling Development Investment Opportunity
14 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 2015 As % of Existing Supply New Square Footage (000s) New Square Footage Completions As a % of existing supply Compelling Development Inve
Slide 15: Industry Leading Fundamentals
15 78.0% 80.0% 82.0% 84.0% 86.0% 88.0% 90.0% 92.0% 94.0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4
Slide 16: Recent Financial Highlights
16 Recent Financial Highlights ▪ Reported 2016 EPS of $2.42 ~ Increase of $3.11 per common share over 2015 ▪ Reported 2016 Adjusted EPS of $3.11 ~ Increase of $3.51 per common share over 2015 ▪ C losed on $105.6 million of new development investments comprising eight projects between January 1, 2017
Slide 17: Experienced and Aligned Senior Management Team
17 Experienced and Aligned Senior Management Team Management Owns Approximately 9% of Company, Creating Significant Alignment o f Interests Dean Jernigan Chairman of the Board & Chief Executive Officer John Good President & Chief Operating Officer Bill Drummond Chief Financial Officer ▪ 32 years of
Slide 18: Attractive Investment Thesis
18 Experienced Senior Management Team with Significant Ownership Significant Identified Growth Opportunities Robust Self - Storage Industry Fundamentals Compelling Investment Economics Flexible Capital Structure and Attractive Valuation High Quality Platform with Demonstrated Expertise Attractive In
Slide 19: Appendix
19 Appendix
Slide 20: REIT Level Investments as of 12/31/2016
20 Remaining $ in 000s Funded Unfunded Closing Date Location (MSA) Investment Type Status Size Investment Commitment Fair Value REIT Level Investments - as of 12/31/2016 4/21/2015 Orlando (2) Development C/O achieved May 2016 $5,372 $5,308 $64 $7,302 6/10/2015 Atlanta 1 (2) Development C/O achieved
Slide 21: Underwriting Timeline Prospect to Closed Investment
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 Even More Attractive Than at IPO
24 Business Plan and Investments are Even More Attractive Today than a t t he Time o f i ts 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 De
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 our newly designated Series A Preferred Stock ▪ The Company believes this capit
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 a total commitmen
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