On August 1, 2018, Jernigan Capital hosted its second quarter earnings call. While company specifics were discussed in great detail, Chairman and CEO Dean Jernigan spent several minutes discussing the sector as a whole, the current development cycle and how the coming years will play out for self storage.
The primary takeaway from Mr. Jernigan’s comments was that the industry can expect a soft landing as the development cycle comes to an end. There has been a constant concern that overbuilding would result from this development cycle, leading to rate and occupancy softening nationally. Mr. Jernigan does not believe this will be the case in most major markets.
“We are very confident that we are out of the clouds and cleared for landing”, he remarked.
Mr. Jernigan believes that while some select markets will have near term lease up issues, specifically Austin, Raleigh and Nashville, population growth rates in these markets will absorb the new, just at a slightly slower pace than other markets.
Overall, Mr. Jernigan sees 2018 and 2019 as the peak years for new facility deliveries in the top 50 MSA’s. The sector should see relative equilibrium in 2020, as typical population growth should support measured development.
Jernigan Capital continues to finance class A, GenV (Vertical) projects in the most attractive submarkets of the top 50 MSAs across the country. To learn more about our financing platform, please visit JerniganCapital.com.