Jernigan Capital, Inc. (NYSE:JCAP) announced today that it has closed its initial investment under its recently launched bridge lending program. The investment was an $83.3 million investment in a portfolio of five self storage facilities in Miami developed by Miami City Self-Storage (MCSS).
The investment consists of five separate first mortgage loans, each having a term of five years with two separate one-year extension options. The loans bear interest at fixed rates of between 6.5% and 6.9% per annum, with two loans having additional paid-in-kind, or PIK, interest of 3.0%. Each loan also provides for a profits interest to the company of 49.9% after certain preferential payments are made, and each loan provides the company with a right of first refusal to acquire the underlying self storage facilities upon sale. All five self storage facilities are managed by CubeSmart, and each facility is a state-of-the art, all climate controlled, Generation V facility. Three facilities, MCSS Brickell, MCSS Coconut Grove and MCSS West Doral, have been open for business in excess of a year. MCSS Pembroke Pines and MCSS Doral are expecting to open by the end of the first quarter.
“We are very pleased to have launched our self-storage bridge investment program with a high profile refinancing. We believe this is the top portfolio of Generation V self storage properties in Miami, one of the top self storage markets in the United States,” stated John Good, President and Chief Operating Officer of the company.
“This transaction has provided a leading national self storage developer with reasonably priced, patient capital, while providing JCAP with a value-additive investment in an outstanding Generation V portfolio of newly-constructed properties, as well as a right of first refusal to acquire those properties in the future. Our ability to partner with a national developer in a bridge transaction that provides returns commensurate with the high-yielding development investments we have made throughout the current development cycle reflects the value that sophisticated self-storage developers and owners place on the expertise, patience and commitment that comes with a JCAP capital investment.”
MCSS Brickell is an approximately 75,000 net rentable square feet Generation V facility located at 1103 SW 3rd Avenue in the Brickell submarket of downtown Miami. This area is the financial center of south Florida and one of the fastest growing areas in Miami. The neighborhood is characterized by numerous upscale high-rise apartment and condominium towers as well as office towers. Approximately 74% of the population in the submarket rent their housing. The facility opened on October 19, 2016 and is currently approximately 67% occupied.
MCSS Coconut Grove is an approximately 52,000 net rentable square feet Generation V facility located at 2434 SW 28th Street in Coconut Grove, a fast-growing affluent submarket located between downtown Miami and Coral Gables, in close proximity to the University of Miami. The submarket is the oldest continuously inhabited neighborhood in Miami-Dade County and is home to numerous specialty retailers, restaurants and marinas. Approximately 47% of the population in the submarket rent their housing. The facility opened December 12, 2016 and is approximately 68% occupied.
MCSS West Doral is an approximately 77,000 net rentable square feet Generation V facility located at 590 NW 137th Avenue in the West Doral submarket in Miami. The submarket is characterized by a population with above-average household incomes living primarily in smaller single-family homes. The submarket has very little self storage. The facility opened August 13, 2016 and is approximately 74% occupied.
MCSS Pembroke Pines is an approximately 85,000 net rentable square feet Generation V facility located at 18460 Pines Blvd. in Pembroke Pines, a densely populated community just southwest of Ft. Lauderdale. The submarket is heavily populated with high-income, primarily single-family residents, and has significantly below average square footage per capital of self storage. The facility is expected to open by end of the first quarter 2018.
MCSS Doral is an approximately 77,000 net rentable square feet Generation V facility located at 4001 NW 77th Avenue in the Doral section of Miami, an area with above-average incomes growing at a rate of almost 2.2% per year. The facility is in a highly visible location at the heavily traveled intersection of 36th Street, a primary east-west thoroughfare running from Doral to midtown Miami and past the Miami International Airport, and the Palmetto Expressway, a main north-south thoroughfare connecting with Interstate 75 north of Doral. The facility is approximately 1.5 miles east of the Trump National Resort at Doral and other golf communities. The facility is also expected to open by the end of the first quarter 2018.
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.