Jernigan Capital — Investor Presentation (June 2017)
27 slides from Jernigan Capital's investor presentation, Jun 5, 2017
Slide 1: Investor Presentation June 2017
1 Investor Presentation June 2017 Exhibit 99.1
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 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 ▪ $825+ million pipeline working through underwriting, principally from long - term relationships ▪ Closed $164.9 million of new development investments f rom January 1, 2017 through May 31, 2017 ▪ Entire pipeline is comprised of development investments ▪ Pathway to outright ownership through ROFR
Slide 5: Industry Leading Fundamentals
5 78.0% 80.0% 82.0% 84.0% 86.0% 88.0% 90.0% 92.0% 94.0% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q
Slide 6: Attractive Investment Thesis
6 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 Inv
Slide 7: High ROI Business Model Supported By Strong Storage Fundamentals
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 $7.6 billion Investments Reviewed $920 million Term Sheets Issued $688 million Signed Term Sheets $ 458 million (~6% of Evaluated) Closed Investments Stringent Underwriting Process Based on Management’s Extensive Experience and Successful Track Record Investing in Self - Sto
Slide 9: Underwriting Track Record
9 Underwriting Track Record Austin Orlando 1 Atlanta 1 Atlanta 2 ▪ Faster lease - up ▪ Higher occupancy and income Consistent Outperformance Relative to Underwriting Commitment Date MSA Date Opened Days Open (1) Current Physical Occupancy (1) Year 1 UW Occupancy 6/19/2015 Tampa 1 4/11/2016 415 78.9%
Slide 10: Attractive Investment Portfolio
10 Attractive Investment Portfolio % Wholly - Owned / % Joint Venture Status of Development Investments (3) ▪ Development investments: C/O LTV 68%, Stabilized LTV 53% ▪ Development investments currently represent 94% of investment portfolio ▪ Wholly - owned portfolio will continue to grow as the Hei
Slide 11: High Quality Self-Storage Properties in Attractive Markets
11 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) Population growth represents projected growth by state from 2010 – 2020. JCAP current states
Slide 12: Jacksonville, FL Case Study - Ground Up Development
12 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 13: Atlanta, GA Case Study - Conversion of Industrial Warehouse
13 ▪ 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 ▪ 226,000 cars pass the site daily on Int
Slide 14: Recent Investments
14 Recent Investments REIT Level Investments Closed April & May 2017 Atlanta 6 Rendering Denver 1 Rendering Date Closed MSA Investment Type Units NRSF Commitment 4/14/2017 Louisville Development C/O expected Q2 2018 642 66,000 $8,523 4/20/2017 Denver 1 Development C/O expected Q2 2018 795 75,000 11,
Slide 15: Current Investment Pipeline
15 ▪ Executed term sheets for investments in 20 separate self - storage development projects for an aggregate capital commitment of approximately $231 million ▪ Maintain a robust $825+ million pipeline of additional development investment opportunities in top 50 U.S. markets Current Investment Pipel
Slide 16: Recent Financial Highlights
16 Recent Financial Highlights ▪ Reported Q1 2017 EPS of $0.14 per share and reaffirmed full year 2017 EPS guidance between $1.62 per share and $2.02 per share ▪ Reported Q1 2017 Adjusted EPS of $0.21 per share and reaffirmed full year 2017 Adjusted EPS guidance between $1.80 per share and $2.30 per
Slide 17: Experienced and Aligned Senior Management Team
17 Experienced and Aligned Senior Management Team ~8% Management 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 ▪ 32 years
Slide 18: Investment Highlights
18 Significant Identified Growth Opportunities Investment Highlights Business Model Supported by Robust Self - Storage Fundamentals Compelling Investment Economics Flexible Capital Structure and Attractive Valuation High Quality Platform with Demonstrated Expertise
Slide 19: Appendix
19 Appendix
Slide 20: Portfolio Detail
20 Portfolio Detail Note: Represents portfolio as of 3/31/2017 (1) Represents principal balance of loan gross of origination fees (2) Facility has achieved certificate of occupancy as of 3/31/2017 (3) Facility had achieved at least 40% construction completion but had not received certificate of occu
Slide 21: Portfolio Detail - Continued
21 Portfolio Detail - Continued (1) Represents principal balance of loan gross of origination fees (2) Total represents portfolio as of 3/31/17 plus investments closed from 4/1/17 - 5/31/17 (3) Total represents total from footnote (2) subtracting out Nashville and Sarasota investments which repaid i
Slide 22: Underwriting Timeline
22 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 Stab
Slide 23: Not A Typical Mortgage REIT
23 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 24: Conservative Underwriting and Expert Processing / Servicing
24 ▪ 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 25: Business Plan and Investments More Attractive Today than at IPO
25 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 26: Highland Capital Series A Preferred Overview
26 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 ▪ The Company believes this capital will support up to
Slide 27: Heitman Capital Management Joint Venture Overview
27 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