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Jernigan Capital Announces Acquisition of 100% Ownership of Development Properties

Posted: 2/6/2018 Link: DigitalJournal.com
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Jernigan Capital, Inc. (NYSE: JCAP) announced today that it has acquired the membership interests of its developer partners in three self storage facilities located in Fleming Island, (Jacksonville MSA) Florida, Alpharetta, (Atlanta MSA) Georgia and Marietta, (Atlanta MSA) Georgia, respectively. All acquisitions were privately negotiated with the development partner without any marketing of the project. Following these acquisitions, Jernigan Capital now has 100% ownership of four of its initial ten on-balance sheet development investments made during the first six months of Jernigan Capital’s existence, demonstrating its ability to execute on its strategy of becoming a long-term owner of the self storage development projects that it has financed during this development cycle.

The aggregate purchase price for the developer interests in the three properties was $8.1 million, which was funded out of existing balance sheet cash. Jernigan Capital’s development loans on the three properties were converted to equity. Based on aggregate estimated stabilized NOI and the Company’s aggregate $28.9 million cash investment in the three properties, Jernigan Capital estimates its weighted average cap rate on the three properties is 8.04%.

Each of the facilities is a Generation V climate-controlled facility ideally located in an underserved, rapidly growing submarket. Each property has exceeded its initial underwritten physical lease up plan, which generally is 40%, 70% and 85% physical occupancy at 12, 24 and 36 months, respectively, following the date the facility is open for business. As of the date of acquisition, the approximate physical occupancy of the three properties (number of months facility has been open in parentheses) was:

  • Fleming Island (16 months) 80.0%
  • Alpharetta (20 months) 66.4%
  • Marietta (20 months) 69.2%

The Alpharetta and Marietta properties are branded and managed by CubeSmart. The Fleming Island property has been managed by Life Storage, but CubeSmart will brand and assume management of that facility on March 1, 2018.

“We are delighted to have been able to acquire prior to the beginning of the spring leasing season these three fine properties, each of which has already significantly leased up in less than two years,” said John Good, President and Chief Operating Officer of Jernigan Capital. “Each of these properties is an excellent long-term investment in a great self-storage submarket. We believe these acquisitions, along with our Ocoee acquisition last year, have charted a pathway to our building the newest, most attractive, best located and best managed self storage portfolio in the sector, which we believe will provide solid long-term returns to our shareholders.”

About Jernigan Capital, Inc.

Jernigan Capital, Inc. is a New York Stock Exchange-listed real estate investment trust (NYSE: JCAP) that 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 highest levels of integrity, dedication, excellence and community, while maximizing shareholder value. The Jernigan Capital team has extensive experience in over 100 U.S. markets—from acquiring and managing self storage properties to new self storage development—providing JCAP with knowledge unmatched by any lender, broker or advisor to the sector. Jernigan Capital is the only source of construction and development capital focused solely on the self storage sector. 

 

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