Jernigan Capital — Investor Presentation (November 2018)
36 slides from Jernigan Capital's investor presentation, Nov 6, 2018
Slide 1: Jernigan Capital November 2018 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 Presentation SAFE HARBOR DISCLOSURE REGARDING FORWARD - LOOKING STATEMENTS This presentation includes "forward - looking statements" within the meaning of Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 and other federal secur
Slide 3: Introduction: Our Mission
November 2018 Investor Presentation INTRODUCTION November 2018 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 fi
Slide 4: Significant Growth Opportunities and Compelling Investment Economics
November 2018 Investor Presentation ▪ $370+ million pipeline of investments in underwriting; $200 to $230 million investment volume estimated for 2018 ▪ 2018 to date: ~$175 million loan commitments closed and additional $13 million invested in developer buyouts ▪ Additional earnings and balance shee
Slide 5: Experienced and Aligned Senior Management Team
November 2018 Investor Presentation EXPERIENCED AND ALIGNED SENIOR MANAGEMENT TEAM ~8.0% Management and Board Ownership Creates Significant Alignment of Interests ~ 9 .0% MANAGEMENT AND BOARD OWNERSHIP CREATES SIGNIFICANT ALIGNMENT OF INTERESTS ▪ 32 + years in the self - storage industry ▪ Invested
Slide 6: JCAP's Competitive Advantage
November 2018 Investor Presentation JCAP’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 dim
Slide 7: High ROI Business Model Executed in Top Self-Storage Markets
November 2018 Investor Presentation HIGH ROI BUSINESS MODEL EXECUTED IN TOP SELF - STORAGE MARKETS ATTRACTIVE RISK - ADJUSTED RETURNS THROUGH EQUITY PARTICIPATION DEVE L OP M ENT INVESTMENTS G r ound - up C onstruction | Major R e d eve lopm e nt ▪ Focus on programmatic self - storage development of
Slide 8: Development Project Investment Timeline
November 2018 Investor Presentation DEVELOPMENT 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 sprea
Slide 9: Significant Unlocked Share Value in Fair Value Accretion
November 2018 Investor Presentation SIGNIFICANT UNLOCKED SHARE VALUE IN FAIR VALUE ACCRETION Source: Company estimates. | (1) Based on common shares outstanding and fair value estimates as of 9 /30/2018 and closings as of 10/31/2018 . 2018 projected capital commitments per the midpoint of the Compan
Slide 10: Value Accretion Sensitivities
November 2018 Investor Presentation VALUE ACCRETION SENSITIVITIES (1) Closed loans as of 10/31/2018. | (2) All amounts less Highland’s 25% share of book value accretion. TABLES DISPLAY POTENTIAL FUTURE FMV ACCRETION ▪ Using current fair market value estimates for closed loans plus remaining projecte
Slide 11: 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 12: Selective Underwriting
November 2018 Investor Presentation SELECTIVE UNDERWRITING (1) Represents closed loan commitments and wholly - owned property investments as of 10/31/18 , including closed investments that have been repaid. STRINGENT UNDERWRITING PROCESS BASED ON MANAGEMENT’S EXTENSIVE EXPERIENCE AND SUCCESSFUL TRAC
Slide 13: Underwriting Track Record - Facilities Open More Than 1 Year
November 2018 Investor Presentation UNDERWRITING 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 10/28/18. | (2) Orlando 1 (51,235 NRSF) was at 86.2% physical occupancy on 7/18/17. On 7/19/17
Slide 14: Underwriting Track Record - Facilities Open Between 3 Months and 1 Year
November 2018 Investor Presentation UNDERWRITING TRACK RECORD – FACILITIES OPEN BETWEEN 4 MONTHS AND 1 YEAR Note : (H ) denotes a facility that is part of our Heitman JV . | (1) Months open and physical occupancy as of 10/28/18. COMMITMENT DATE MSA DATE OPENED MONTHS OPEN (1) CURRENT PHYSICAL OCCUPA
Slide 15: Attractive Investment Portfolio
November 2018 Investor Presentation ATTRACTIVE INVESTMENT PORTFOLIO $ 838 MILLION COMMITTED (1) / 70 INVESTMENTS (1) INVESTMENTS BY TYPE (2) % ON BALANCE SHEET / % JOINT VENTURE STATUS OF DEVELOPMENT INVESTMENTS ▪ Open and Operating LTV: 72% ▪ Stabilized LTV: 56% ▪ Development investments currently
Slide 16: High Quality Self-Storage Properties in Attractive Markets
November 2018 Investor Presentation HIGH 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, Chi
Slide 17: Current Portfolio and Investment Pipeline
November 2018 Investor Presentation 17 CURRENT PORTFOLIO AND INVESTMENT PIPELINE Note: As of 10/31/2018. Boston Los Angeles Development Markets Existing Markets Existing Markets & Pipeline Pipeline Washington, DC Kansas City New Haven - Bridgeport Seattle New York City – Northern NJ Philadelphia Tam
Slide 18: Business Model Proven from Origination to Acquisition
November 2018 Investor Presentation BUSINESS MODEL PROVEN FROM ORIGINATION TO ACQUISITION (1) F unded 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
Slide 19: Six Wholly-Owned Properties
November 2018 Investor Presentation SIX WHOLLY - OWNED PROPERTIES (1) Based on aggregate estimated stabilized NOI of ~$5.0 million and the Company’s aggregate $57.9 million cash investment in the six properties, which includes the sum of the funded principal balance of the loan (net of unamortized o
Slide 20: Bridge Recapitalization
November 2018 Investor Presentation BRIDGE RECAPITALIZATION (1) The two projects under construction will each also pay a $1 million preferred return to the developer after payment to JCAP of th e P IK interest and before the 49.9% profits interest split. | (2) Physical occupancy as of 10/28/2018 . I
Slide 21: Supply / Demand Balance: Top MSAs
November 2018 Investor Presentation SUPPLY / DEMAND BALANCE: TOP 50 MSAs Source: Census Bureau and Yardi ® Matrix as of October 2018. | Note : Average Facility Size 75,000 NRSF, expansions excluded. 26 42 53 66 199 254 352 460 - 510 375 - 425 190 - 230 200 200 200 200 200 200 200 200 200 200 - 100 2
Slide 22: Well-Positioned for Growth Following Record Investment Year
November 2018 Investor Presentation WELL - POSITIONED FOR GROWTH FOLLOWING RECORD INVESTMENT YEAR ▪ Top - line growth driven by 32 new investments in 2017, more than doubling JCAP’s portfolio of high - quality self - storage investmen ts ▪ Continued availability of high - returning development oppor
Slide 23: JCAP Capital Sources and Investment Uses
November 2018 Investor Presentation JCAP CAPITAL SOURCES AND INVESTMENT USES (1) Does not include financing spend, positive operating cash flow or any additional purchases of developers’ interest. | (2) Assumes our ability to increase the capacity under our Credit Facility through the exercise of th
Slide 24: Contact Jernigan Capital
November 2018 Investor Presentation CONTACT JERNIGAN CAPITAL JERNIGAN CAPITAL, INC investorrelations@jernigancapital.com 6410 Poplar Ave, Suite 650 Memphis, TN 38119 www.jernigancapital.com 24 November 2018 Investor Presentation
Slide 25: Appendix
November 2018 Investor Presentation APPENDIX
Slide 26: Portfolio Detail
November 2018 Investor Presentation PORTFOLIO 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 conside rat ion (inclusive of transaction costs), assumed liabilities, an
Slide 27: Portfolio Detail - Continued
November 2018 Investor Presentation PORTFOLIO DETAIL – CONTINUED 27 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
Slide 28: Portfolio Detail - Continued
November 2018 Investor Presentation PORTFOLIO DETAIL – CONTINUED 28 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 o
Slide 29: Portfolio Detail - Continued
November 2018 Investor Presentation PORTFOLIO DETAIL – CONTINUED 29 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
Slide 30: Portfolio Detail - Continued
November 2018 Investor Presentation PORTFOLIO 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
Slide 31: JCAP Is an Equity REIT, Not a Mortgage REIT
November 2018 Investor Presentation JCAP 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 problems o
Slide 32: Heitman Capital Management Joint Venture Overview
November 2018 Investor Presentation HEITMAN 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 Ove
Slide 33: Highland Capital Series A Preferred Overview
November 2018 Investor Presentation HIGHLAND 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 Octob
Slide 34: Credit Facility Overview
November 2018 Investor Presentation CREDIT FACILITY OVERVIEW Lead Lenders / Arrangers KeyBank Capital Markets, Inc. and Raymond James Bank, N.A. Structure of the Investment Senior secured revolving credit facility Investment Size Up to $100 million debt capital, e xpandable up to $200 million with a
Slide 35: Term Loans Overview
November 2018 Investor Presentation TERM 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 var
Slide 36: Series B Preferred Stock Overview
November 2018 Investor Presentation SERIES 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 Curr
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