Jernigan Capital Inc., a merchant bank and advisory firm serving the self-storage industry, has released its financial statement for the quarter that ended March 31, 2016. The company reported $115 million of new capital to fund existing and future loan commitments, including $110 million from the Storage Lenders LLC joint venture with an affiliate of Heitman Capital Management LLC.
“The first quarter was a transformational quarter for our company,” said Dean Jernigan, chairman and CEO. “First and foremost, we witnessed our initial self-storage development investments approach certificate-of-occupancy stage at estimated fair values that significantly exceeded our initial expectations and guidance, allowing us to increase by approximately 50 percent our guidance of expected fair-value increases. Our financial results clearly demonstrate our ability to create shareholder value by focusing on well-located self-storage development projects during this unprecedented period of success for the self-storage sector.”
The company declared a quarterly dividend of $0.35 per share of common stock on March 31, resulting in a book value per share of $16.30 per share compared to $16.44 per share the previous quarter.
At the end of the first quarter, the firm had total assets of $106.5 million, including $28.8 million in cash, total investments of $75.3 million, and total equity of $101.1 million. As of March 31, the company had no debt, according to the report.
The lender reported net income of $1.1 million, or $0.18 per share, and adjusted earnings for the quarter were $3.2 million, or $0.53 per share, an increase of $2 million and $3.9 million, respectively, over the net loss and adjusted loss from the fourth quarter of 2015.
Jernigan Capital had interest income of approximately $1.1 million for the quarter, a 13.4 percent increase from the previous quarter. It incurred costs and expenses of more than $3.8 million for an operating loss during the quarter of $2.69 million. Its administrative and general expenses decreased 8.6 percent from the previous quarter.
The company had a $7.9 million interest in the Storage Lenders joint venture through the end of the quarter with a commitment of $12.2 million. It has contributed three existing development-property investments with an aggregate committed principal amount of approximately $41.9 million, receiving credit of $8.1 million toward its full commitment. Subsequent to the end of the quarter, the joint venture closed two development property investments for an aggregate $27.5 million, leaving $52.8 million of capacity for new development property investments within the joint venture, the report stated.
“Sustained high occupancy, limited new supply and increasing rental rates for new-generation, class-A self-storage facilities, combined with limited competition from banks and other capital providers, continue to provide us with exceptional investment opportunities with best-of-class developers in some of the top self-storage markets in the United States,” said John Good, president and chief operating officer. “Our strong asset appreciation has allowed us to increase our annual adjusted earnings guidance by an average of 34 percent. We believe our entrepreneurial business model will continue to deliver to our shareholders excellent total returns as our projects are completed and leased.”
Jernigan Capital is a commercial real estate finance company that provides financing to private developers, operators and owners of self-storage facilities. The company offers financing for acquisition, ground-up construction, major redevelopment or refinancing. The firm intends to be taxed as a real estate investment trust and is externally managed by JCap Advisors LLC.
