Table of Contents
Second Quarter 2018 
1
Forward Looking Statements
This Supplemental Information package contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These forward-looking statements include, without limitation, statements about our estimates, expectations, predictions and forecasts of our future business plans and financial and operating performance and/or results, including our third quarter and full-year 2018 earnings guidance, our ability to successfully source, structure, negotiate and close investments in self-storage facilities, our ability to fund our outstanding future investment commitments, the availability, terms and our rate of deployment of equity capital and our ability to increase borrowing base of our credit facility, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” or similar expressions or their negatives, as well as statements in future tense, we intend to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual financial and operating results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such differences are described in the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2017, and those set forth in our other reports and information filed with the Securities and Exchange Commission (“SEC”), which factors include, without limitation, the following:
| | |
| | our ability to successfully source, structure, negotiate and close investments in self-storage facilities; |
| | changes in our business strategy and the market’s acceptance of our investment terms; |
| | our ability to fund our outstanding and future investment commitments; |
| | our ability to obtain certificates of occupancy at the facilities in which we invest; |
| | the future availability for borrowings under our credit facility (including borrowing base capacity and the availability of the accordion feature); |
| | availability, terms and our rate of deployment of equity and debt capital; |
| | our manager’s ability to hire and retain qualified personnel; |
| | changes in the self-storage industry, interest rates or the general economy; |
| | the degree and nature of our competition; |
| | volatility in the value of our assets carried at fair market value; |
| | potential limitations on our ability to pay dividends at historical rates; |
| | limitations in our existing and future debt agreements on our ability to pay distributions; |
| | the impact of our outstanding preferred stock on our ability to execute our business plan and pay distributions on our common stock; and |
| | general volatility of the capital markets and the market price of our common stock. |
Given these uncertainties, undue reliance should not be placed on our forward-looking statements. We assume no duty or responsibility to publicly update or revise any forward-looking statement that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events. We urge you to review the disclosures concerning risks in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K for the year ended December 31, 2017 and in other documents that we file from time-to-time with the SEC.
Non-GAAP Financial Measures
Adjusted Earnings is a non-GAAP measure and is defined as net income attributable to common stockholders plus stock dividends payable to preferred stockholders, stock-based compensation expense, depreciation and amortization on real estate assets, loss on modification of debt, and other expenses. Management uses Adjusted Earnings and Adjusted Earnings per diluted share as key performance indicators in evaluating the operations of the Company's business. The Company is a capital provider to self-storage developers and believes that these measures are useful to management and investors as a starting point in measuring its operational performance because they exclude various equity-based payments (including stock dividends) and other items included in net income that do not relate to or are not indicative of its present and future operating performance, which can make periodic and peer analyses of operating performance more difficult. The Company’s computation of Adjusted Earnings and Adjusted Earnings per share may not be comparable to other key performance indicators reported by other REITs or real estate companies. Reconciliations of Adjusted Earnings and Adjusted Earnings per share to Net income attributable to common stockholders and Earnings per share, respectively, are provided in the attached table entitled “Calculation of Adjusted Earnings.”
Second Quarter 2018 2
Press Release – July 2018
Jernigan Capital Reports Second Quarter Results Above Guidance Range with 24% YoY Growth in Net Income and 82% YoY Growth in Adjusted Earnings
MEMPHIS, Tennessee, July 31, 2018 / Business Wire / Jernigan Capital, Inc. (NYSE: JCAP), a leading capital partner for self-storage entrepreneurs nationwide, today announced results for the quarter ended June 30, 2018, initiated earnings per share and adjusted earnings per share guidance for the third quarter 2018 and adjusted its guidance for full year 2018 to reflect the June common stock offering, among other changes.
Second Quarter Highlights include:
| § | | Quarterly earnings per share and adjusted earnings per share of $0.40 and $0.64, or $0.05 and $0.04, respectively, above the top end of the Company’s quarterly guidance ranges provided with its first quarter 2018 earnings release, due primarily to interest income and fair value increases exceeding expectations. |
| § | | Grew its investment portfolio by closing six new on-balance sheet development investments during the quarter for a combined total commitment amount of $67.0 million. |
| § | | Enhanced its strong balance sheet by successfully executing an upsized public offering of 4.6 million shares of its common stock at a public offering price of $18.50 per share for net proceeds of approximately $81.1 million. |
| § | | Added Jonathan Perry to its executive team as Executive Vice President and Chief Investment Officer. |
“2018 continues to be an exceptional year for JCAP,” stated Dean Jernigan, Chairman and Chief Executive Officer of Jernigan Capital, Inc. “During the second quarter alone, we closed on six new on-balance sheet development investments, bringing us to $175.2 million of capital commitments to date in 2018, or 81% of the midpoint of our annual investment guidance. Our development investment pipeline stands at approximately $475 million today, intentionally down from prior highs as we look to meticulously underwrite and develop only the best sites in underserved submarkets while we continue to monitor opportunities to transition into the property ownership chapter of our Company’s life.”
John Good, President and Chief Operating Officer of Jernigan Capital, Inc. added, “Our second quarter results represent 179% growth in total revenues, 24% growth in net income attributable to common stockholders and 82% growth in adjusted earnings compared to the comparable quarter in 2017. The summer leasing season has exceeded expectations for our 21 development and wholly-owned self-storage properties, with our lease-up properties adding 11% of occupancy since the end of April. These properties are on average 54% occupied, or 10% ahead of our initial underwriting expectations (44%). By comparison, occupancy at the end of April stood at 43%, or 3% ahead of initial underwriting at that time. We believe the exceptional performance of our portfolio is indicative of the quality of our self-storage properties, our micro-market locations, as well as the revenue management systems and marketing power of our third party managers.”
“We further strengthened our balance sheet by issuing $81.8 million of common stock during the quarter in an underwritten public offering and through the use of our at-the-market offering program, as well as by issuing an additional $36.5 million of preferred stock to Highland Capital and through our Series B preferred stock at-the-market program. Our capital commitments are now fully-covered through 2019 and we have positioned ourselves to maintain low leverage levels for the foreseeable future.” Mr. Good added, “Finally, we are very excited to have added Jonathan Perry to our executive team as Executive Vice President and Chief Investment Officer. Jonathan brings to JCAP extensive experience and relationships in the self-storage industry, and we believe that as the real estate cycle progresses and we move into a period of more customized and innovative investment opportunities, including a period of increased acquisitions of developer interests in our properties and other potential growth initiatives, Jonathan is the perfect addition to our already strong team.”
Financial Highlights
Net income attributable to common stockholders for the three months ended June 30, 2018 was $6.2 million, an increase of $1.2 million, or 24%, over the $5.0 million net income attributable to common stockholders for the comparable quarter in 2017. Net income attributable to common stockholders for the six months ended June 30, 2018 was $8.0 million, an increase of $1.7 million, or 28%, over the $6.3 million reported for the comparable six month period in 2017.
Adjusted earnings for the three months ended June 30, 2018 was $10.0 million, an 82% increase over the $5.5 million adjusted earnings for the comparable quarter of 2017. Adjusted earnings for the six months ended June 30, 2018 was $15.2 million compared to $7.4 million for the comparable six month period in 2017, a 105% increase.
Second Quarter 2018 3
Earnings per share and adjusted earnings per share for the three months ended June 30, 2018 were $0.40 and $0.64, or $0.05 and $0.04, respectively, over the top end of the Company’s guidance range.
Total revenues for the three and six months ended June 30, 2018 were $7.2 million and $12.5 million, respectively, representing increases of $4.6 million, or 179%, and $7.6 million, or 154%, over total revenues for the three and six months ended June 30, 2017, respectively. The increase in revenues is primarily attributed to the increase in the outstanding principal balances on the Company’s investment portfolio and the increase in rental and other property-related income derived from the Company’s self-storage real estate owned.
General and administrative expenses for the three and six months ended June 30, 2018 were $2.0 million and $3.9 million, compared to $1.4 million and $2.9 million for the comparable 2017 periods, respectively. Included in these amounts were stock-based compensation expense (“SBE”) of $0.8 million and $0.4 million for the three months ended June 30, 2018 and 2017, respectively, and $1.1 million and $0.7 million for the six months ended June 30, 2018 and 2017, respectively. The increase in SBE was primarily due to additional restricted stock grants to certain officers and employees of the Company’s external manager during 2017 and 2018.
Net income attributable to common stockholders and adjusted earnings for the three and six months ended June 30, 2018 also include increases in the fair value of investments of $8.6 million and $12.9 million, respectively, compared to increases of $4.3 million and $5.7 million for the comparable periods in 2017. This represents a $4.3 million, or 101%, and $7.3 million, or 128%, year-over-year increase from the three and six months ended June 30, 2017, respectively. During 2017, the Company consummated 32 on-balance sheet development investments totaling $408.8 compared to three on-balance sheet development investments totaling $25.6 million in 2016. The increase in the fair value of investments is driven primarily by construction progression on the Company’s 2017 investments.
Capital Markets Activities
On June 14, 2018, the Company completed an underwritten public offering of 4,600,000 shares of its common stock, receiving $81.1 million in proceeds, net of underwriters’ discounts and offering expenses payable by the Company.
In addition, as of June 30, 2018, the Company had issued 110,000 shares of its Series A Preferred Stock and received $110.0 million in gross proceeds pursuant to the terms of a purchase agreement between the Company and Highland Capital Management (the “Purchase Agreement”). Effective as of July 25, 2018, the Company entered into the First Amendment to the Purchase Agreement in order to extend the final date to issue Series A Preferred Stock under the Purchase Agreement from July 27, 2018 to September 30, 2018. Accordingly, as of July 31, 2018, the Company has $15.0 million available for issuance under the Purchase Agreement.
As of June 30, 2018, the Company had no borrowings under its secured revolving credit facility of its $90.8 million in total availability. The Company expects such availability to increase over the balance of 2018 as the Company’s on-balance sheet self-storage investments continue to achieve certificates of occupancy and commence lease-up.
Additionally, the Company has signed a non-binding term sheet to enter into term loans in an aggregate principal amount of $24.9 million secured by three of its wholly-owned assets. The Company expects to close on these loans during the third quarter of 2018.
Dividends
On May 2, 2018, the Company declared cash and stock dividends on its Series A Preferred Stock. The cash dividend of $1.8 million was paid on July 13, 2018 to holders of record on July 1, 2018. A stock dividend of 111,199 shares of common stock was issued on July 13, 2018 to holders of record on July 1, 2018 for an aggregate value of $2.1 million pursuant to the terms of the Stock Purchase Agreement.
On May 2, 2018, the Company declared a cash dividend on its Series B Preferred Stock. The cash dividend of $0.7 million was paid on July 13, 2018 to holders of record on July 2, 2018.
Additionally, on May 2, 2018, the Company declared a dividend of $0.35 per common share. The dividend was paid on July 13, 2018 to common stockholders of record on July 2, 2018.
Second Quarter 2018 4
Third Quarter and Full-Year 2018 Guidance
The following table reflects earnings per share and adjusted earnings per share guidance ranges for the three months ending September 30, 2018 and updated guidance for the full-year 2018. Such guidance is based on management's current expectations of Company investment activity (including fair value appreciation and the expected timing of construction progress), the operational and new supply dynamics of the self-storage markets in which the Company has invested, and overall economic conditions. Adjusted earnings is a performance measure that is not specifically defined by accounting principles generally accepted in the United States (“GAAP”) and is defined as net income attributable to common stockholders (computed in accordance with GAAP) plus stock dividends payable to preferred stockholders, stock-based compensation expense, depreciation and amortization on real estate assets, and other expenses. For more information about our calculation of adjusted earnings, see “Non-GAAP Financial Measures” below.
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Dollars in thousands, |
| | except share and per share data |
| | Three months ending | | Year ending |
| | September 30, 2018 | | December 31, 2018 |
| | Low | | High | | Low | | High |
Interest income from investments | | $ | 7,400 | | $ | 7,500 | | $ | 25,650 | | $ | 26,450 |
Rental revenue from real estate owned | | | 880 | | | 900 | | | 3,150 | | | 3,250 |
Other income | | | 30 | | | 35 | | | 90 | | | 110 |
Total revenues | | $ | 8,310 | | $ | 8,435 | | $ | 28,890 | | $ | 29,810 |
G&A expenses (1) | | | (3,845) | | | (3,730) | | | (15,350) | | | (14,650) |
Property operating expenses (excl. depreciation and amortization) | | | (470) | | | (440) | | | (1,690) | | | (1,590) |
Depreciation and amortization on real estate assets | | | (820) | | | (800) | | | (3,250) | | | (3,150) |
Interest expense | | | (520) | | | (490) | | | (2,750) | | | (2,550) |
Other expenses | | | - | | | - | | | (290) | | | (290) |
JV income | | | 445 | | | 475 | | | 1,600 | | | 1,800 |
Other interest income | | | 100 | | | 120 | | | 270 | | | 330 |
Change in fair value of investments (2) | | | 10,500 | | | 12,500 | | | 41,000 | | | 47,000 |
Net income | | | 13,700 | | | 16,070 | | | 48,430 | | | 56,710 |
Net income attributable to preferred stockholders (3) | | | (4,825) | | | (4,785) | | | (18,060) | | | (17,970) |
Net income attributable to common stockholders | | | 8,875 | | | 11,285 | | | 30,370 | | | 38,740 |
Add: stock dividends | | | 2,125 | | | 2,125 | | | 8,500 | | | 8,500 |
Add: stock-based compensation | | | 390 | | | 380 | | | 1,870 | | | 1,820 |
Add: depreciation and amortization on real estate assets | | | 820 | | | 800 | | | 3,250 | | | 3,150 |
Add: other expenses | | | - | | | - | | | 290 | | | 290 |
Adjusted earnings | | $ | 12,210 | | $ | 14,590 | | $ | 44,280 | | $ | 52,500 |
Earnings per share – diluted | | $ | 0.46 | | $ | 0.58 | | $ | 1.77 | | $ | 2.25 |
Adjusted earnings per share - diluted | | $ | 0.63 | | $ | 0.75 | | $ | 2.57 | | $ | 3.05 |
Average shares outstanding - diluted | | | 19,400,000 | | | 19,400,000 | | | 17,200,000 | | | 17,200,000 |
| |
(1) | Includes $1.9 million (low and high) and $7.6 million (low) / $7.1 million (high) of fees due to the Manager for the three months ending September 30, 2018 and for the year ending December 31, 2018, respectively. |
(2) | Excludes $0.3 million (low and high) and $1.0 million (low) / $1.1 million (high) of unrealized appreciation in fair value of investments from the real estate venture which is included in JV income for the three months ending September 30, 2018 and for the year ending December 31, 2018, respectively. |
(3) | Represents both cash dividends and stock dividends (which stock dividends will be paid out in either shares of the Company’s common stock or additional shares of Series A Preferred Stock, at the option of the Series A stockholders) estimated with respect to shares of Series A Preferred Stock, as well as cash dividends estimated with respect to shares of Series B Preferred Stock. |
The guidance above is based on the following key assumptions regarding the Company’s business activities in 2018:
| § | | Impact of development and investment activity: |
| · | | Projected closings on $200 million to $230 million of new self-storage investments with a profits interest for the full-year 2018, including the approximately $83 million bridge loan investment closed on March 2, 2018 ($175.2 million closed as of July 31, 2018 and $24.8 million subject to non-binding term sheets with projected closing in 2018); and |
Second Quarter 2018 5
| · | | Fundings of approximately $300 million to $320 million on the Company’s closed and projected investment commitments during the full-year 2018 ($177.1 million as of June 30, 2018). |
| § | | Impact of financing activity: |
| · | | Guidance ranges assume 2018 investment fundings and commitments are financed with long-term capital, with specific impact on 2018 earnings dependent upon the amount, timing, cost, and form of capital raised. |
| · | | Specific assumptions included in guidance are as follows: |
| ž | | Proceeds of $85.0 million from the issuance of Series A Preferred Stock during the first nine months of 2018, which includes the issuance of $70.0 million of Series A Preferred Stock through July 31, 2018; |
| ž | | Impact of the amendment to the Series A Preferred Stock that was executed during the first quarter of 2018 which had the effect of leveling out the quarterly stock dividend through the second quarter of 2021; |
| ž | | Impact of the issuance of $39.3 million of 7.00% Series B Cumulative Redeemable Perpetual Preferred Stock through July 31, 2018; |
| ž | | Impact of the issuance of 4.6 million shares of common stock in June 2018; and |
| ž | | Utilization of debt over the remaining course of the year with expected borrowings at year-end of $55.0 million to $65.0 million. |
Additionally, the Company continues to monitor its 2018 fair value guidance with updated estimates of construction progress from its development partners. Of the estimated $41.0 million to $47.0 million of fair value appreciation in 2018, the Company recognized $4.3 million in the first quarter, $8.6 million in the second quarter, and expects $10.5 million to $12.5 million to be recognized in the third quarter, and $17.6 million to $21.6 million to be recognized in the fourth quarter. Timing of fair value appreciation is heavily dependent upon construction progress, which is subject to factors outside the control of the Company’s development partners. As such, the exact timing of fair value recognition is subject to change.
Refer to the Company’s Second Quarter 2018 Supplemental Information Package for more information.
Second Quarter 2018 6
Jernigan Capital, Inc.
Financial Highlights- Trailing Five Quarters
(unaudited, in thousands, except share and per share data)
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Three months ended |
| | June 30, | | March 31, | | December 31, | | September 30, | | June 30, |
| | 2018 | | 2018 | | 2017 | | 2017 | | 2017 |
Operating Data: | | | | | | | | | | | | | | | |
Interest income, rental-related income and other revenues | | $ | 7,241 | | $ | 5,216 | | $ | 3,930 | | $ | 3,361 | | $ | 2,599 |
JV income | | | 435 | | | 550 | | | 516 | | | 730 | | | 595 |
Total revenues and JV income | | | 7,676 | | | 5,766 | | | 4,446 | | | 4,091 | | | 3,194 |
General & administrative expenses | | | (3,616) | | | (3,122) | | | (2,597) | | | (2,422) | | | (2,078) |
Property operating expenses of real estate owned | | | (420) | | | (311) | | | (83) | | | (114) | | | (43) |
Depreciation and amortization of real estate owned | | | (887) | | | (702) | | | (238) | | | (172) | | | (38) |
Interest expense | | | (638) | | | (416) | | | (296) | | | (323) | | | (230) |
Loss on modification of debt | | | - | | | - | | | - | | | (232) | | | - |
Other expenses | | | - | | | (290) | | | - | | | - | | | - |
Subtotal | | | 2,115 | | | 925 | | | 1,232 | | | 828 | | | 805 |
Change in fair value of investments | | | 8,623 | | | 4,320 | | | 1,738 | | | 3,384 | | | 4,289 |
Other interest income | | | 59 | | | 109 | | | 155 | | | 245 | | | 100 |
Net income | | | 10,797 | | | 5,354 | | | 3,125 | | | 4,457 | | | 5,194 |
Net income attributable to preferred stockholders | | | (4,580) | | | (3,595) | | | (423) | | | (310) | | | (177) |
Net income attributable to common stockholders | | $ | 6,217 | | $ | 1,759 | | $ | 2,702 | | $ | 4,147 | | $ | 5,017 |
Plus: stock dividends payable to preferred stockholders | | | 2,125 | | | 2,125 | | | 44 | | | 132 | | | - |
Plus: stock-based compensation | | | 777 | | | 345 | | | 272 | | | 296 | | | 435 |
Plus: depreciation and amortization on real estate assets | | | 887 | | | 702 | | | 238 | | | 172 | | | 38 |
Plus: loss on modification of debt | | | - | | | - | | | - | | | 232 | | | - |
Plus: other expenses | | | - | | | 290 | | | - | | | - | | | - |
Adjusted Earnings | | $ | 10,006 | | $ | 5,221 | | $ | 3,256 | | $ | 4,979 | | $ | 5,490 |
| | | | | | | | | | | | | | | |
Basic earnings per share attributable to common stockholders | | $ | 0.40 | | $ | 0.12 | | $ | 0.19 | | $ | 0.29 | | $ | 0.50 |
Diluted earnings per share attributable to common stockholders | | $ | 0.40 | | $ | 0.12 | | $ | 0.19 | | $ | 0.29 | | $ | 0.50 |
| | | | | | | | | | | | | | | |
Adjusted Earnings per share attributable to common stockholders - diluted | | $ | 0.64 | | $ | 0.36 | | $ | 0.23 | | $ | 0.35 | | $ | 0.55 |
| | | | | | | | | | | | | | | |
Dividends declared per share of common stock | | $ | 0.35 | | $ | 0.35 | | $ | 0.35 | | $ | 0.35 | | $ | 0.35 |
| | | | | | | | | | | | | | | |
Weighted-average shares of common stock outstanding: | | | | | | | | | | | | | | | |
Basic | | | 15,274,459 | | | 14,247,174 | | | 14,108,415 | | | 14,042,350 | | | 9,850,967 |
Diluted | | | 15,564,317 | | | 14,555,337 | | | 14,295,639 | | | 14,244,345 | | | 10,033,029 |
Shares of common stock outstanding: | | | 19,254,141 | | | 14,447,043 | | | 14,429,055 | | | 14,235,848 | | | 14,238,350 |
| | | | | | | | | | | | | | | |
Balance Sheet Data: | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 43,331 | | $ | 15,238 | | $ | 46,977 | | $ | 54,999 | | $ | 100,529 |
Development property investments at fair value | | | 302,245 | | | 239,754 | | | 228,233 | | | 188,540 | | | 163,979 |
Bridge loan investments at fair value | | | 79,581 | | | 77,435 | | | - | | | - | | | - |
Operating property loans at fair value | | | 5,862 | | | 5,885 | | | 5,938 | | | 5,990 | | | 8,790 |
Self-storage real estate owned, net | | | 59,835 | | | 60,459 | | | 15,355 | | | 15,594 | | | 7,283 |
Investment in and advances to self-storage real estate venture | | | 14,846 | | | 14,759 | | | 13,856 | | | 12,573 | | | 14,314 |
Total assets | | | 509,860 | | | 417,252 | | | 314,634 | | | 284,193 | | | 305,127 |
Senior loan participations | | | - | | | 732 | | | 718 | | | 668 | | | 20,147 |
Secured revolving credit facility | | | - | | | 30,000 | | | - | | | - | | | - |
Total liabilities | | | 16,122 | | | 43,944 | | | 8,814 | | | 8,434 | | | 28,733 |
Total equity | | | 493,738 | | | 373,308 | | | 305,820 | | | 275,759 | | | 276,394 |
Common book value / common shares outstanding | | $ | 18.13 | | $ | 18.35 | | $ | 18.58 | | $ | 18.71 | | $ | 18.75 |
Second Quarter 2018 7
Jernigan Capital, Inc.
Consolidated Balance Sheets- Trailing Five Quarters
(unaudited, in thousands)
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | As of |
| | June 30, | | March 31, | | December 31, | | September 30, | | June 30, |
| | 2018 | | 2018 | | 2017 | | 2017 | | 2017 |
Assets: | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 43,331 | | $ | 15,238 | | $ | 46,977 | | $ | 54,999 | | $ | 100,529 |
Self-Storage Investment Portfolio: | | | | | | | | | | | | | | | |
Development property investments at fair value | | | 302,245 | | | 239,754 | | | 228,233 | | | 188,540 | | | 163,979 |
Bridge loan investments at fair value | | | 79,581 | | | 77,435 | | | - | | | - | | | - |
Operating property loans at fair value | | | 5,862 | | | 5,885 | | | 5,938 | | | 5,990 | | | 8,790 |
Self-storage real estate owned, net | | | 59,835 | | | 60,459 | | | 15,355 | | | 15,594 | | | 7,283 |
Investment in and advances to self-storage real estate venture | | | 14,846 | | | 14,759 | | | 13,856 | | | 12,573 | | | 14,314 |
Other loans, at cost | | | 1,361 | | | 1,103 | | | 1,313 | | | 1,754 | | | 6,619 |
Deferred financing costs | | | 1,644 | | | 1,565 | | | 2,004 | | | 3,813 | | | 2,305 |
Prepaid expenses and other assets | | | 975 | | | 884 | | | 776 | | | 734 | | | 1,119 |
Fixed assets, net | | | 180 | | | 170 | | | 182 | | | 196 | | | 189 |
Total assets | | $ | 509,860 | | $ | 417,252 | | $ | 314,634 | | $ | 284,193 | | $ | 305,127 |
| | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | |
Senior loan participations | | $ | - | | $ | 732 | | $ | 718 | | $ | 668 | | $ | 20,147 |
Secured revolving credit facility | | | - | | | 30,000 | | | - | | | - | | | - |
Due to Manager | | | 1,887 | | | 1,405 | | | 1,484 | | | 1,438 | | | 1,027 |
Accounts payable, accrued expenses and other liabilities | | | 2,916 | | | 3,155 | | | 1,138 | | | 1,035 | | | 2,399 |
Dividends payable | | | 11,319 | | | 8,652 | | | 5,474 | | | 5,293 | | | 5,160 |
Total liabilities | | $ | 16,122 | | $ | 43,944 | | $ | 8,814 | | $ | 8,434 | | $ | 28,733 |
| | | | | | | | | | | | | | | |
Equity: | | | | | | | | | | | | | | | |
Series A Cumulative preferred stock | | $ | 107,168 | | $ | 72,181 | | $ | 37,764 | | $ | 9,445 | | $ | 9,445 |
Series B Cumulative preferred stock | | | 37,463 | | | 35,988 | | | - | | | - | | | - |
Common stock | | | 192 | | | 144 | | | 144 | | | 142 | | | 142 |
Additional paid-in capital | | | 361,636 | | | 277,194 | | | 276,814 | | | 272,726 | | | 272,525 |
Accumulated deficit | | | (12,721) | | | (12,199) | | | (8,902) | | | (6,554) | | | (5,718) |
Total equity | | | 493,738 | | | 373,308 | | | 305,820 | | | 275,759 | | | 276,394 |
Total liabilities and equity | | $ | 509,860 | | $ | 417,252 | | $ | 314,634 | | $ | 284,193 | | $ | 305,127 |
Second Quarter 2018 8
Jernigan Capital, Inc.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
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| | | | | | | | | | | | |
| | Three months ended | | Six months ended |
| | June 30, | | June 30, |
| | 2018 | | 2017 | | 2018 | | 2017 |
Revenues: | | | | | | | | | | | | |
Interest income from investments | | $ | 6,403 | | $ | 2,467 | | $ | 10,965 | | $ | 4,586 |
Rental and other property-related income from real estate owned | | | 805 | | | 105 | | | 1,428 | | | 168 |
Other revenues | | | 33 | | | 27 | | | 64 | | | 146 |
Total revenues | | | 7,241 | | | 2,599 | | | 12,457 | | | 4,900 |
| | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | |
General and administrative expenses | | | 2,034 | | | 1,371 | | | 3,852 | | | 2,949 |
Management fees to Manager | | | 1,582 | | | 707 | | | 2,886 | | | 1,337 |
Property operating expenses of real estate owned | | | 420 | | | 43 | | | 731 | | | 74 |
Depreciation and amortization of real estate owned | | | 887 | | | 38 | | | 1,589 | | | 62 |
Other expenses | | | - | | | - | | | 290 | | | - |
Total costs and expenses | | | 4,923 | | | 2,159 | | | 9,348 | | | 4,422 |
| | | | | | | | | | | | |
Operating income | | | 2,318 | | | 440 | | | 3,109 | | | 478 |
| | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | |
Equity in earnings from unconsolidated real estate venture | | | 435 | | | 595 | | | 985 | | | 1,017 |
Change in fair value of investments | | | 8,623 | | | 4,289 | | | 12,943 | | | 5,682 |
Interest expense | | | (638) | | | (230) | | | (1,054) | | | (434) |
Other interest income | | | 59 | | | 100 | | | 168 | | | 234 |
Total other income | | | 8,479 | | | 4,754 | | | 13,042 | | | 6,499 |
Net income | | | 10,797 | | | 5,194 | | | 16,151 | | | 6,977 |
Net income attributable to preferred stockholders | | | (4,580) | | | (177) | | | (8,175) | | | (723) |
Net income attributable to common stockholders | | $ | 6,217 | | $ | 5,017 | | $ | 7,976 | | $ | 6,254 |
| | | | | | | | | | | | |
Basic earnings per share attributable to common stockholders | | $ | 0.40 | | $ | 0.50 | | $ | 0.53 | | $ | 0.66 |
Diluted earnings per share attributable to common stockholders | | $ | 0.40 | | $ | 0.50 | | $ | 0.53 | | $ | 0.66 |
| | | | | | | | | | | | |
Dividends declared per share of common stock | | $ | 0.35 | | $ | 0.35 | | $ | 0.70 | | $ | 0.70 |
Second Quarter 2018 9
Jernigan Capital, Inc.
Calculation of Adjusted Earnings and Reconciliation to Net Income Attributable to Common Stockholders
(unaudited, in thousands, except share and per share data)
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Three months ended |
| | June 30, | | March 31, | | December 31, | | September 30, | | June 30, |
| | 2018 | | 2018 | | 2017 | | 2017 | | 2017 |
Net income attributable to common stockholders | | $ | 6,217 | | $ | 1,759 | | $ | 2,702 | | $ | 4,147 | | $ | 5,017 |
Plus: stock dividends payable to preferred stockholders | | | 2,125 | | | 2,125 | | | 44 | | | 132 | | | - |
Plus: stock-based compensation | | | 777 | | | 345 | | | 272 | | | 296 | | | 435 |
Plus: depreciation and amortization on real estate assets | | | 887 | | | 702 | | | 238 | | | 172 | | | 38 |
Plus: loss on modification of debt | | | - | | | - | | | - | | | 232 | | | - |
Plus: other expenses | | | - | | | 290 | | | - | | | - | | | - |
Adjusted Earnings | | $ | 10,006 | | $ | 5,221 | | $ | 3,256 | | $ | 4,979 | | $ | 5,490 |
| | | | | | | | | | | | | | | |
Adjusted Earnings per share attributable to common stockholders - diluted | | $ | 0.64 | | $ | 0.36 | | $ | 0.23 | | $ | 0.35 | | $ | 0.55 |
| | | | | | | | | | | | | | | |
Weighted average shares of common stock outstanding - diluted | | | 15,564,317 | | | 14,555,337 | | | 14,295,639 | | | 14,244,345 | | | 10,033,029 |
| | | | | | |
| | | | | | |
| | Six months ended |
| | June 30, 2018 | | June 30, 2017 |
Net income attributable to common stockholders | | $ | 7,976 | | $ | 6,254 |
Plus: stock dividends payable to preferred stockholders | | | 4,250 | | | 371 |
Plus: stock-based compensation | | | 1,122 | | | 727 |
Plus: depreciation and amortization on real estate assets | | | 1,589 | | | 62 |
Plus: other expenses | | | 290 | | | - |
Adjusted Earnings | | $ | 15,227 | | $ | 7,414 |
| | | | | | |
Adjusted Earnings per share attributable to common stockholders - diluted | | $ | 1.01 | | $ | 0.78 |
| | | | | | |
Weighted average shares of common stock outstanding - diluted | | | 15,058,187 | | | 9,507,947 |
Second Quarter 2018 10
Jernigan Capital, Inc.
Third Quarter and Full Year 2018 Guidance
(in thousands, except share and per share data)
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Three months ending | | Year ending |
| | September 30, 2018 | | December 31, 2018 |
| | Low | | High | | Low | | High |
Interest income from investments | | $ | 7,400 | | $ | 7,500 | | $ | 25,650 | | $ | 26,450 |
Rental revenue from real estate owned | | | 880 | | | 900 | | | 3,150 | | | 3,250 |
Other income | | | 30 | | | 35 | | | 90 | | | 110 |
Total revenues | | $ | 8,310 | | $ | 8,435 | | $ | 28,890 | | $ | 29,810 |
G&A expenses (1) | | | (3,845) | | | (3,730) | | | (15,350) | | | (14,650) |
Property operating expenses (excl. depreciation and amortization) | | | (470) | | | (440) | | | (1,690) | | | (1,590) |
Depreciation and amortization on real estate assets | | | (820) | | | (800) | | | (3,250) | | | (3,150) |
Interest expense | | | (520) | | | (490) | | | (2,750) | | | (2,550) |
Other expenses | | | - | | | - | | | (290) | | | (290) |
JV income | | | 445 | | | 475 | | | 1,600 | | | 1,800 |
Other interest income | | | 100 | | | 120 | | | 270 | | | 330 |
Change in fair value of investments (2) | | | 10,500 | | | 12,500 | | | 41,000 | | | 47,000 |
Net income | | | 13,700 | | | 16,070 | | | 48,430 | | | 56,710 |
Net income attributable to preferred stockholders (3) | | | (4,825) | | | (4,785) | | | (18,060) | | | (17,970) |
Net income attributable to common stockholders | | | 8,875 | | | 11,285 | | | 30,370 | | | 38,740 |
Add: stock dividends | | | 2,125 | | | 2,125 | | | 8,500 | | | 8,500 |
Add: stock-based compensation | | | 390 | | | 380 | | | 1,870 | | | 1,820 |
Add: depreciation and amortization on real estate assets | | | 820 | | | 800 | | | 3,250 | | | 3,150 |
Add: other expenses | | | - | | | - | | | 290 | | | 290 |
Adjusted earnings | | $ | 12,210 | | $ | 14,590 | | $ | 44,280 | | $ | 52,500 |
Earnings per share – diluted | | $ | 0.46 | | $ | 0.58 | | $ | 1.77 | | $ | 2.25 |
Adjusted earnings per share - diluted | | $ | 0.63 | | $ | 0.75 | | $ | 2.57 | | $ | 3.05 |
Average shares outstanding - diluted | | | 19,400,000 | | | 19,400,000 | | | 17,200,000 | | | 17,200,000 |
| |
(1) | Includes $1.9 million (low and high) and $7.6 million (low) / $7.1 million (high) of fees due to the Manager for the three months ending September 30, 2018 and for the year ending December 31, 2018, respectively. |
(2) | Excludes $0.3 million (low and high) and $1.0 million (low) / $1.1 million (high) of unrealized appreciation in fair value of investments from the real estate venture which is included in JV income for the three months ending September 30, 2018 and for the year ending December 31, 2018, respectively. |
(3) | Represents both cash dividends and stock dividends (which stock dividends will be paid out in either shares of the Company’s common stock or additional shares of Series A Preferred Stock, at the option of the Series A stockholders) estimated with respect to shares of Series A Preferred Stock, as well as cash dividends estimated with respect to shares of Series B Preferred Stock. |
Full-Year Key Assumptions:
| § | | Projected closings on $200 million to $230 million of new self-storage investments with a profits interest for the full-year 2018, including the approximately $83 million bridge loan investment closed on March 2, 2018 ($175.2 million closed as of July 31, 2018 and $24.8 million subject to non-binding term sheets with projected closing in 2018); |
| § | | Fundings of approximately $300 million to $320 million on the Company’s closed and projected investment commitments during the full-year 2018 ($177.1 million as of June 30, 2018); |
| § | | Guidance ranges assume 2018 investment fundings and commitments are financed with long-term capital, with specific impact on 2018 earnings dependent upon the amount, timing, cost, and form of capital raised; and |
| · | | Specific assumptions included in guidance are as follows: |
| ž | | Proceeds of $85.0 million from the issuance of Series A Preferred Stock during the first nine months of 2018, which includes the issuance of $70.0 million of Series A Preferred Stock through July 31, 2018; |
| ž | | Impact of the amendment to the Series A Preferred Stock that was executed during the first quarter of 2018 which had the effect of leveling out the quarterly stock dividend through the second quarter of 2021; |
| ž | | Impact of the issuance of $39.3 million of 7.00% Series B Cumulative Redeemable Perpetual Preferred Stock through July 31, 2018; |
| ž | | Impact of the issuance of 4.6 million shares of common stock in June 2018; and |
| ž | | Utilization of debt over the remaining course of the year with expected borrowings at year-end of $55.0 million to $65.0 million. |
| § | | No change in the key assumptions used to value the Company’s investments other than the assumption of two 25 basis points interest rate increases for the remainder of 2018. |
The Company continues to monitor its 2018 fair value guidance with updated estimates of construction progress from its development partners. Timing of fair value appreciation is heavily dependent upon construction which is subject to factors outside the control of the Company’s development partners. As such, the exact timing of fair value recognition is subject to change.
Second Quarter 2018 11
Jernigan Capital, Inc.
Schedule of Owned Properties
As of June 30, 2018
(unaudited, dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Fair Value | | | | | | | | | | | | | | | | | | | | | | | |
Location | | | | | | | | | Recognized | | | | | Projected | | Stabilized | | Stabilized | | | | | | | | | |
(MSA) | | Date | | Date | | Cash | | Through Date | | Gross | | Stabilized | | Yield on | | Yield on | | Size | | Months | | % Physical |
Address | | Opened | | Acquired | | Basis (1) | | Acquired | | Basis (2) | | NOI (3) | | Cash Basis | | Gross Basis | | (NRSF) (4) | | Open (5) | | Occupancy (5) |
Orlando 1/2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
11920 W Colonial Dr. | | 5/1/2016 | | 8/9/2017 | | | 12,047 | | | 3,780 | | | 15,827 | | | 1,095 | | | 9.1 | % | | | 6.9 | % | | | 93,965 | | 27 | | | 84.3 | % |
Atlanta 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
340 Franklin Gateway SE | | 5/24/2016 | | 2/2/2018 | | | 8,766 | | | 2,900 | | | 11,666 | | | 759 | | | 8.7 | % | | | 6.5 | % | | | 66,137 | | 26 | | | 89.0 | % |
Atlanta 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
5110 McGinnis Ferry Rd | | 5/25/2016 | | 2/2/2018 | | | 10,467 | | | 2,704 | | | 13,171 | | | 864 | | | 8.3 | % | | | 6.6 | % | | | 71,718 | | 26 | | | 75.8 | % |
Jacksonville 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
1939 East West Pkwy | | 8/12/2016 | | 1/10/2018 | | | 8,686 | | | 2,947 | | | 11,633 | | | 709 | | | 8.2 | % | | | 6.1 | % | | | 59,848 | | 24 | | | 94.7 | % |
Pittsburgh | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
6400 Hamilton Ave | | 5/11/2017 | | 2/20/2018 | | | 7,619 | | | 1,976 | | | 9,595 | | | 688 | | | 9.0 | % | | | 7.2 | % | | | 48,024 | | 15 | | | 47.9 | % |
Total Owned Properties | | | | $ | 47,585 | | $ | 14,307 | | $ | 61,892 | | $ | 4,115 | | | 8.6 | % | | | 6.6 | % | | | | | | | | | |
| | |
| (1) | Cash basis represents the sum of the funded principal balance of the loan (net of unamortized origination fees), cash consideration (inclusive of transaction costs), assumed liabilities, and net property working capital acquired, all as of the date of acquisition. Pittsburgh cash basis also includes $200k of construction costs incurred after the date of acquisition to bring the asset to a state that will allow it to generate its projected stabilized NOI. |
| (2) | Gross basis represents cash basis as defined above plus fair value appreciation recognized through the date of acquisition. |
| (3) | Net operating income (NOI) is a non- GAAP financial measure that excludes from operating income the impact of depreciation and general and administrative expense. Projected stabilized NOI represents NOI at an expected time in the future when operations at the facility have stabilized from lease up occupancy and rental rates. |
| (4) | The net rentable square feet (“NRSF”) includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces. |
| (5) | As of July 29, 2018. |
Second Quarter 2018 12
Jernigan Capital, Inc.
Schedule of Completed Projects
As of June 30, 2018
(unaudited, dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Location | | | | | | | | Remaining | | | | | | | | | | | | | | | |
| | (MSA) | | | | | Funded | | Unfunded | | | | | | Size | | Date | | Months | | % Physical |
Closing Date | | Address | | Commitment | | Investment | | Commitment (1) | | Fair Value | | | (NRSF) (2) | | Opened | | Open (3) | | Occupancy (3) |
6/19/2015 | | Tampa 1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 12832 S US Highway 301 | | | 5,369 | | | 5,285 | | | 84 | | | 5,931 | | | | 50,090 | | 4/11/2016 | | 28 | | | 87.1 | % |
6/29/2015 | | Charlotte 1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 9323 Wright Hill Rd | | | 7,624 | | | 7,357 | | | 267 | | | 9,556 | | | | 86,680 | | 8/18/2016 | | 23 | | | 61.0 | % |
7/2/2015 | | Milwaukee | | | | | | | | | | | | | | | | | | | | | | | | |
| | 420 W St Paul Ave | | | 7,650 | | | 7,641 | | | 9 | | | 9,241 | | | | 81,755 | | 10/9/2016 | (4) | 22 | | | 57.1 | % |
7/31/2015 | | New Haven | | | | | | | | | | | | | | | | | | | | | | | | |
| | 453 Washington Ave | | | 6,930 | | | 6,600 | | | 330 | | | 8,342 | | | | 64,225 | | 12/16/2016 | | 19 | | | 70.7 | % |
10/27/2015 | | Austin | | | | | | | | | | | | | | | | | | | | | | | | |
| | 251 N AW Grimes Blvd | | | 8,658 | | | 7,551 | | | 1,107 | | | 8,600 | | | | 77,234 | | 3/16/2017 | | 16 | | | 69.1 | % |
1/4/2017 | | New York City 1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1775 5th Ave | | | 16,117 | | | 16,056 | | | 61 | | | 20,934 | | | | 105,347 | | 9/29/2017 | | 10 | | | 39.7 | % |
8/14/2015 | | Raleigh | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1501 Sunrise Ave | | | 8,792 | | | 8,176 | | | 616 | | | 8,442 | | | | 60,171 | | 3/8/2018 | | 5 | | | 13.4 | % |
11/17/2016 | | Jacksonville 2 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 37 Jefferson Rd | | | 7,530 | | | 6,890 | | | 640 | | | 8,512 | | | | 70,480 | | 3/27/2018 | | 4 | | | 27.1 | % |
Total Completed Development Loans | | $ | 68,670 | | $ | 65,556 | | $ | 3,114 | | $ | 79,558 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
3/2/2018 | | Miami 6 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 590 NW 137th Ave | | | 13,370 | | | 13,370 | | | - | | | 17,129 | �� | | | 76,665 | | 8/12/2016 | | 24 | | | 79.2 | % |
3/2/2018 | | Miami 4 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1103 SW 3rd Ave | | | 20,201 | | | 19,627 | | | 574 | | | 20,997 | | | | 74,685 | | 10/9/2016 | | 22 | | | 80.5 | % |
3/2/2018 | | Miami 8 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2434 West 28th Lane | | | 13,553 | | | 13,013 | | | 540 | | | 12,554 | | | | 51,923 | | 12/12/2016 | | 20 | | | 85.2 | % |
3/2/2018 | | Miami 7 | | | | | | | | | | | | | | | | | | | | | | | | |
| | 18460 Pines Blvd | | | 18,462 | | | 16,755 | | | 1,707 | | | 14,892 | | | | 86,880 | | 3/26/2018 | | 4 | | | 20.5 | % |
Total Completed Bridge Loans | | $ | 65,586 | | $ | 62,765 | | $ | 2,821 | | $ | 65,572 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Completed Projects | | $ | 134,256 | | | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | Commitment is fixed during underwriting at an amount deemed sufficient to cover interest carry and excess operating expenses over rental revenue during lease-up and deferred developer’s fees (if any) payable upon stabilization. Remaining unfunded commitment on completed projects is expected to be utilized primarily for such purposes. To the extent not needed for such purposes, such commitment will not be advanced. |
| | |
| (2) | The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces. |
| | |
| (3) | As of July 29, 2018. |
| (4) | Certificate of Occupancy (“C/O”) was received in August 2016, prior to the property being ready for opening by the manager of the project. Property opened to partial leasing in October 2016. All floors opened to leasing in February 2017. |
| | |
| | |
Second Quarter 2018 13
Schedule of Projects in Progress
As of June 30, 2018
(unaudited, dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | Location | | | | | | | | Remaining | | | | | | | | | | Estimated |
| | (MSA) | | | | | Funded | | Unfunded | | | | | Size | | Construction | | C/O |
Closing Date | | Address | | Commitment | | Investment | | Commitment | | Fair Value | | (NRSF) (2) | | Start Date | | Quarter (1) |
9/20/2016 | | Charlotte 2 | | | | | | | | | | | | | | | | | | | |
| | 1200 E 10th St | | | 12,888 | | | 9,497 | | | 3,391 | | | 10,660 | | | 77,915 | | Q1 2017 | | Q3 2018 |
1/18/2017 | | Atlanta 3 | | | | | | | | | | | | | | | | | | | |
| | 1484 Northside Dr NW | | | 14,115 | | | 4,212 | | | 9,903 | | | 4,028 | | | 92,935 | | Q4 2017 | | Q2 2019 |
1/31/2017 | | Atlanta 4 | | | | | | | | | | | | | | | | | | | |
| | 4676 S Atlanta Rd | | | 13,678 | | | 10,206 | | | 3,472 | | | 11,995 | | | 105,288 | | Q2 2017 | | Q3 2018 (4) |
2/24/2017 | | Orlando 3 | | | | | | | | | | | | | | | | | | | |
| | 12711 E Colonial Dr | | | 8,056 | | | 5,961 | | | 2,095 | | | 7,004 | | | 70,625 | | Q3 2017 | | Q3 2018 (4) |
2/24/2017 | | New Orleans | | | | | | | | | | | | | | | | | | | |
| | 2709 Severn Ave | | | 12,549 | | | 4,411 | | | 8,138 | | | 4,454 | | | 86,765 | | Q3 2017 | | Q1 2019 |
2/27/2017 | | Atlanta 5 | | | | | | | | | | | | | | | | | | | |
| | 56 Peachtree Valley Rd NE | | | 17,492 | | | 8,262 | | | 9,230 | | | 8,179 | | | 84,988 | | Q3 2017 | | Q1 2019 |
3/1/2017 | | Fort Lauderdale | | | | | | | | | | | | | | | | | | | |
| | 5601 NE 14th Ave | | | 9,952 | | | 3,934 | | | 6,018 | | | 4,045 | | | 79,279 | | Q1 2018 | | Q1 2019 |
3/1/2017 | | Houston | | | | | | | | | | | | | | | | | | | |
| | 1070 Brittmoore Rd | | | 13,630 | | | 6,079 | | | 7,551 | | | 6,388 | | | 133,035 | | Q4 2017 | | Q4 2018 |
4/14/2017 | | Louisville 1 | | | | | | | | | | | | | | | | | | | |
| | 2801 N Hurstbourne Pkwy | | | 8,523 | | | 5,255 | | | 3,268 | | | 6,049 | | | 66,150 | | Q2 2017 | | Q3 2018 |
4/20/2017 | | Denver 1 | | | | | | | | | | | | | | | | | | | |
| | 6206 W Alameda Ave | | | 9,806 | | | 3,706 | | | 6,100 | | | 3,587 | | | 59,150 | | Q1 2018 | | Q1 2019 |
4/20/2017 | | Denver 2 | | | | | | | | | | | | | | | | | | | |
| | 3110 S Wadsworth Blvd | | | 11,164 | | | 8,173 | | | 2,991 | | | 9,718 | | | 74,615 | | Q2 2017 | | Q3 2018 (4) |
5/2/2017 | | Atlanta 6 | | | | | | | | | | | | | | | | | | | |
| | 2033 Monroe Dr | | | 12,543 | | | 8,658 | | | 3,885 | | | 9,863 | | | 81,170 | | Q2 2017 | | Q3 2018 |
5/2/2017 | | Tampa 2 | | | | | | | | | | | | | | | | | | | |
| | 9185 Ulmerton Rd | | | 8,091 | | | 2,070 | | | 6,021 | | | 1,991 | | | 71,400 | | Q1 2018 | | Q1 2019 |
5/19/2017 | | Tampa 3 | | | | | | | | | | | | | | | | | | | |
| | Lot 3B Crossroads Town Center | | | 9,224 | | | 4,379 | | | 4,845 | | | 4,787 | | | 70,888 | | Q3 2017 | | Q4 2018 |
6/12/2017 | | Tampa 4 | | | | | | | | | | | | | | | | | | | |
| | 3209 30th Ave S St | | | 10,266 | | | 6,127 | | | 4,139 | | | 7,187 | | | 73,500 | | Q4 2017 | | Q4 2018 |
6/19/2017 | | Baltimore | | | | | | | | | | | | | | | | | | | |
| | 1835 Washington Blvd | | | 10,775 | | | 5,584 | | | 5,191 | | | 5,667 | | | 84,975 | | Q3 2017 | | Q4 2018 |
6/28/2017 | | Knoxville | | | | | | | | | | | | | | | | | | | |
| | 7807 Kingston Pike | | | 9,115 | | | 4,367 | | | 4,748 | | | 4,605 | | | 72,069 | | Q3 2017 | | Q4 2018 |
6/29/2017 | | Boston 1 | | | | | | | | | | | | | | | | | | | |
| | 329 Boston Post Rd | | | 14,103 | | | 10,801 | | | 3,302 | | | 11,786 | | | 91,055 | | Q3 2017 | | Q3 2018 |
6/30/2017 | | New York City 2 | | | | | | | | | | | | | | | | | | | |
| | 465 W 150th St | | | 26,482 | | | 20,356 | | | 6,126 | | | 19,759 | | | 40,593 | | Q4 2017 | | Q4 2018 |
7/27/2017 | | Jacksonville 3 | | | | | | | | | | | | | | | | | | | |
| | 2004 Edison Ave | | | 8,096 | | | 4,411 | | | 3,685 | | | 4,993 | | | 68,700 | | Q4 2017 | | Q4 2018 |
8/30/2017 | | Orlando 4 | | | | | | | | | | | | | | | | | | | |
| | 9001 Eastmar Commons | | | 9,037 | | | 2,661 | | | 6,376 | | | 2,561 | | | 77,125 | | Q1 2018 | | Q1 2019 |
9/14/2017 | | Los Angeles 1 | | | | | | | | | | | | | | | | | | | |
| | 943-959 W Hyde Park Blvd | | | 28,750 | | | 7,923 | | | 20,827 | | | 7,672 | | | 120,038 | | Q1 2019 | | Q3 2020 |
9/14/2017 | | Miami 1 | | | | | | | | | | | | | | | | | | | |
| | 4250 SW 8th St | | | 14,657 | | | 6,942 | | | 7,715 | | | 6,785 | | | 69,175 | | Q2 2018 | | Q3 2019 |
9/28/2017 | | Louisville 2 | | | | | | | | | | | | | | | | | | | |
| | 3415 Bardstown Rd | | | 9,940 | | | 5,316 | | | 4,624 | | | 5,861 | | | 74,172 | | Q4 2017 | | Q4 2018 |
10/12/2017 | | Miami 2 | | | | | | | | | | | | | | | | | | | |
| | 880 W Prospect Rd | | | 9,459 | | | 1,062 | | | 8,397 | | | 818 | | | 58,000 | | Q4 2018 | | Q1 2020 |
10/30/2017 | | New York City 3 | | | | | | | | | | | | | | | | | | | |
| | 5203 Kennedy Blvd | | | 14,701 | | | 3,712 | | | 10,989 | | | 3,384 | | | 68,660 | | Q4 2017 | | Q3 2019 |
11/16/2017 | | Miami 3 | | | | | | | | | | | | | | | | | | | |
| | 120-132 NW 27th Ave | | | 20,168 | | | 4,309 | | | 15,859 | | | 3,740 | | | 96,295 | | Q3 2018 | | Q1 2020 |
11/21/2017 | | Minneapolis 1 | | | | | | | | | | | | | | | | | | | |
| | 2109 University Ave W | | | 12,674 | | | 285 | | | 12,389 | | | 156 | | | 88,838 | | Q2 2018 | | Q3 2019 |
12/1/2017 | | Boston 2 | | | | | | | | | | | | | | | | | | | |
| | 10 Hampshire Rd | | | 8,771 | | | 2,329 | | | 6,442 | | | 2,235 | | | 74,625 | | Q4 2017 | | Q1 2019 |
12/15/2017 | | New York City 4 | | | | | | | | | | | | | | | | | | | |
| | 6 Commerce Center Dr | | | 10,591 | | | 1,283 | | | 9,308 | | | 1,168 | | | 78,425 | | Q2 2018 | | Q3 2019 |
12/27/2017 | | Boston 3 | | | | | | | | | | | | | | | | | | | |
| | 19 Coolidge Hill Rd | | | 10,174 | | | 2,475 | | | 7,699 | | | 2,306 | | | 62,700 | | Q4 2018 | | Q1 2020 |
Second Quarter 2018 14
12/28/2017 | | New York City 5 | | | | | | | | | | | | | | | | | | | |
| | 375 River St | | | 16,073 | | | 5,101 | | | 10,972 | | | 4,945 | | | 90,200 | | Q3 2018 | | Q3 2019 |
2/8/2018 | | Minneapolis 2 | | | | | | | | | | | | | | | | | | | |
| | 3216 Winnetka Ave N | | | 10,543 | | | 3,944 | | | 6,599 | | | 3,878 | | | 83,114 | | Q2 2018 | | Q1 2019 |
3/2/2018 | | Miami 5 (3) | | | | | | | | | | | | | | | | | | | |
| | 4001 NW 77th Ave | | | 17,738 | | | 16,108 | | | 1,630 | | | 14,009 | | | 77,237 | | Q4 2016 | | Q3 2018 |
3/30/2018 | | Philadelphia | | | | | | | | | | | | | | | | | | | |
| | 550 Allendale Rd | | | 14,338 | | | 3,558 | | | 10,780 | | | 3,274 | | | 69,383 | | Q2 2018 | | Q3 2019 |
4/6/2018 | | Minneapolis 3 | | | | | | | | | | | | | | | | | | | |
| | 101 American Blvd West | | | 12,883 | | | 2,613 | | | 10,270 | | | 2,489 | | | 86,075 | | Q4 2018 | | Q4 2019 |
5/1/2018 | | Miami 9 | | | | | | | | | | | | | | | | | | | |
| | 10651 W Okeechobee Rd | | | 12,421 | | | 2,448 | | | 9,973 | | | 2,219 | | | 70,538 | | Q1 2019 | | Q3 2019 |
5/15/2018 | | Atlanta 7 | | | | | | | | | | | | | | | | | | | |
| | 2915 Webb Rd | | | 9,418 | | | 857 | | | 8,561 | | | 772 | | | 76,519 | | Q3 2018 | | Q3 2019 |
5/23/2018 | | Kansas City | | | | | | | | | | | | | | | | | | | |
| | 510 Southwest Blvd | | | 9,968 | | | 1,413 | | | 8,555 | | | 1,324 | | | 77,188 | | Q3 2018 | | Q3 2019 |
6/7/2018 | | Orlando 5 | | | | | | | | | | | | | | | | | | | |
| | 7212 W Sand Lake Rd | | | 12,969 | | | - | | | 12,969 | | | - | | | 76,147 | | Q3 2018 | | Q3 2019 |
6/12/2018 | | Los Angeles 2 | | | | | | | | | | | | | | | | | | | |
| | 7855 Haskell Ave | | | 9,298 | | | 4,424 | | | 4,874 | | | 4,500 | | | 116,022 | | Q3 2019 | | Q4 2020 |
Total Projects in Progress | | $ | 515,119 | | $ | 215,212 | | $ | 299,907 | | $ | 220,841 | | | | | | | |
| | |
| (1) | Estimated C/O dates represent the Company’s best estimate as of June 30, 2018 based on project specific information learned through underwriting and communications with respective developers. These dates are subject to change due to unexpected project delays/efficiencies. |
| (2) | The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces. |
| (3) | This investment is a bridge loan. |
| (4) | This facility received a temporary C/O or C/O subsequent to June 30, 2018. |
Second Quarter 2018 15
Schedule of Heitman JV Development Projects Completed and in Progress
As of June 30, 2018
(unaudited, dollars in thousands)
Development Projects Completed:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | Location | | | | | | | | Remaining | | | | | | | | | | | | | | |
| | (MSA) | | | | | Funded | | Unfunded | | | | | Size | | Date | | Months | | % Physical |
Closing Date | | Address | | Commitment | | Investment | | Commitment (1) | | Fair Value | | (NRSF) (2) | | Opened | | Open (3) | | Occupancy (3) |
7/19/2016 | | Jacksonville | | | | | | | | | | | | | | | | | | | | | | | |
| | 3211 San Pablo Rd S | | | 8,127 | | | 7,378 | | | 749 | | | 11,594 | | | 80,621 | | 7/26/2017 | | 12 | | | 71.6 | % |
9/28/2016 | | Columbia | | | | | | | | | | | | | | | | | | | | | | | |
| | 401 Hampton St | | | 9,199 | | | 8,566 | | | 633 | | | 9,780 | | | 70,935 | | 8/23/2017 | | 11 | | | 72.4 | % |
8/15/2016 | | Atlanta 2 | | | | | | | | | | | | | | | | | | | | | | | |
| | 11220 Medlock Bridge Rd | | | 8,772 | | | 7,982 | | | 790 | | | 9,119 | | | 70,289 | | 9/14/2017 | | 11 | | | 32.7 | % |
4/15/2016 | | Washington DC | | | | | | | | | | | | | | | | | | | | | | | |
| | 1325 Kenilworth Ave NE | | | 17,269 | | | 16,426 | | | 843 | | | 18,980 | | | 90,115 | | 9/25/2017 | | 10 | | | 46.4 | % |
8/25/2016 | | Denver | | | | | | | | | | | | | | | | | | | | | | | |
| | 2225 E 104th Ave | | | 11,032 | | | 9,998 | | | 1,034 | | | 12,335 | | | 85,575 | | 12/14/2017 | | 8 | | | 41.0 | % |
5/14/2015 | | Miami 1 | | | | | | | | | | | | | | | | | | | | | | | |
| | 490 NW 36th St | | | 13,867 | | | 11,829 | | | 2,038 | | | 14,263 | | | 75,770 | | 2/23/2018 | | 5 | | | 24.8 | % |
4/29/2016 | | Atlanta 1 | | | | | | | | | | | | | | | | | | | | | | | |
| | 1801 Savoy Dr | | | 10,223 | | | 9,304 | | | 919 | | | 10,299 | | | 71,150 | | 4/12/2018 | | 4 | | | 20.4 | % |
12/22/2016 | | Raleigh | | | | | | | | | | | | | | | | | | | | | | | |
| | 7710 Alexander Town Blvd | | | 8,877 | | | 7,243 | | | 1,634 | | | 8,642 | | | 64,103 | | 6/8/2018 | | 2 | | | 7.6 | % |
Total Completed Development Projects | | $ | 87,366 | | $ | 78,726 | | $ | 8,640 | | $ | 95,012 | | | | | | | | | | | |
| | |
| (1) | Commitment is fixed during underwriting at an amount deemed sufficient to cover interest carry and excess operating expenses over rental revenue during lease-up and deferred developer’s fees (if any) payable upon stabilization. Remaining unfunded commitment on completed projects is expected to be utilized primarily for such purposes. To the extent not needed for such purposes, such commitment will not be advanced. |
| | |
| (2) | The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces. |
| | |
| (3) | As of July 29, 2018. |
| | |
| | |
Development Projects In Progress:
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | Location | | | | | | | | Remaining | | | | | | | | | | Estimated |
| | (MSA) | | | | | Funded | | Unfunded | | | | | Size | | Construction | | C/O |
Closing Date | | Address | | Commitment | | Investment | | Commitment | | Fair Value | | (NRSF) (2) | | Start Date | | Quarter (1) |
5/14/2015 | | Miami 2 | | | | | | | | | | | | | | | | | | | |
| | 1100 NE 79th St | | | 14,849 | | | 12,704 | | | 2,145 | | | 14,137 | | | 74,113 | | Q2 2016 | | Q3 2018 |
9/25/2015 | | Fort Lauderdale | | | | | | | | | | | | | | | | | | | |
| | 812 NW 1st St | | | 13,230 | | | 11,211 | | | 2,019 | | | 13,166 | | | 87,413 | | Q2 2016 | | Q3 2018 (3) |
7/21/2016 | | New Jersey | | | | | | | | | | | | | | | | | | | |
| | 10 Central Ave | | | 7,828 | | | 3,493 | | | 4,335 | | | 3,525 | | | 57,975 | | Q2 2017 | | Q4 2018 |
Total Development Projects in Progress | | $ | 35,907 | | $ | 27,408 | | $ | 8,499 | | $ | 30,828 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total Heitman JV Investments | | $ | 123,273 | | $ | 106,134 | | $ | 17,139 | | $ | 125,840 | | | | | | | |
| | |
| (1) | Estimated C/O dates represent the Company’s best estimate as of June 30, 2018 based on project specific information learned through underwriting and communications with respective developers. These dates are subject to change due to unexpected project delays/efficiencies. |
| (2) | The NRSF includes only climate controlled and non-climate controlled storage space. It does not include retail space, office space, non-covered RV space or parking spaces. |
| (3) | This facility received a temporary C/O or C/O subsequent to June 30, 2018. |
Second Quarter 2018 16
Closed Investments by Geography
As of June 30, 2018
Second Quarter 2018 17
Sources and Uses for Development
As of June 30, 2018
(dollars in millions)
| | | |
| | | |
Estimated Capital Uses: | | | Remaining Capital Needs |
Contractual investment obligations | | | |
Development property investments | | $ | 303 |
Bridge loan investments | | | 4 |
Self-storage real estate venture | | | 2 |
Total Committed Uses | | $ | 309 |
Remaining Prospective Commitments per FY 2018 guidance: | | | 40 |
Total to Fund Investments | | $ | 349 |
| | | |
| | | |
Estimated Sources: | | | Capital Sources |
Cash and Cash Equivalents as of June 30, 2018 | | $ | 43 |
Remaining Series A Preferred Stock to be Issued (expected in Q3 2018) | | | 15 |
Identified loan repayment (expected in Q3 2018) | | | 17 |
Identified asset sale (expected in Q3 2018) | | | 6 |
Identified secured debt on three wholly-owned properties (expected in Q3 2018) | | | 25 |
Remaining credit facility capacity | | | 200 |
Remaining capital needs | | | 43 |
Total Sources | | $ | 349 |
The company may use any combination of the following capital sources to fund its $43 million of remaining capital needs:
| · | | Refinancing of JCAP mortgage (49.9% profits interest and ROFR retained) - $60 million to $70 million |
| · | | Sales of assets that JCAP does not wish to own or acquire - $20 million |
| · | | Series B preferred ATM issuances - $10 million |
| · | | Common stock issuances (ATM or underwritten offerings) - $20 million |
| · | | Secured debt on individual properties - $5 million to $10 million |
| · | | Joint venture proceeds - $5 million to $10 million |
Timing of Funding $349 million of Remaining Commitments
Second Quarter 2018 18
Capital Structure
As of June 30, 2018
| | | |
| | | |
Credit Facility Outstanding | | $ | - |
Series A Preferred Stock | | | 110,000 |
Series B Preferred Stock | | | 39,293 |
Common Stock | | | 366,984 |
Total Capital | | $ | 516,277 |
Second Quarter 2018 19
Jernigan Capital, Inc.
Company Information
| | | |
Corporate Headquarters | Trading Symbol | Investor Relations | Information Requests |
6410 Poplar Avenue | Common shares: JCAP | 6410 Poplar Avenue | To request an Investor Relations |
Suite 650 | 7.00% Series B Preferred Stock: JCAP- | Suite 650 | package or annual report, please |
Memphis, TN 38119 | PR B | Memphis, TN 38119 | visit our website at |
901.567.9510 | Stock Exchange Listing | 901.567.9510 | www.jernigancapital.com |
| New York Stock Exchange | | |
Executive Management
| |
Dean Jernigan | John A. Good |
Chairman and Chief Executive Officer | President and Chief Operating Officer |
| |
Jonathan Perry | David Corak |
Executive Vice President and Chief Investment Officer | Senior Vice President of Corporate Finance |
| |
Kelly P. Luttrell | |
Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary | |
Independent Directors
| |
Mark O. Decker | James D. Dondero |
Director | Director |
| |
Howard A. Silver | Harry J. Thie |
Director | Director |
Equity Research Coverage
| |
Baird Equity Research | B. Riley FBR |
RJ Milligan | Tim Hayes |
rjmilligan@rwbaird.com | timothyhayes@brileyfbr.com |
| |
Jefferies LLC | KeyBanc Capital Markets |
George Hoglund | Todd M. Thomas |
gholund@jefferies.com | tthomas@key.com |
| |
Raymond James & Associates | |
Jonathan Hughes | |
jonathan.hughes@raymondjames.com | |
Any opinions, estimates, forecasts or predictions regarding Jernigan Capital’s performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Jernigan Capital or its management. Jernigan Capital does not by its reference above or distribution imply its endorsement of or concurrence with such opinions, estimates, forecasts or predictions.
Second Quarter 2018 20
