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Jernigan Capital Reports Second Quarter Results
MEMPHIS, Tennessee, August 6, 2020 / Business Wire / Jernigan Capital, Inc. (NYSE: JCAP), an owner of self-storage facilities and a leading capital partner for self-storage entrepreneurs nationwide, today announced results for the quarter ended June 30, 2020.
Second Quarter Highlights include:
|◾||Reported $(0.24) loss per share and adjusted earnings per share of $0.04|
|◾||Increased the number of wholly owned self-storage facilities on its balance sheet or in its SL1 Joint Venture from 29 to 37 through developer buyouts of eight development property investments including the Jacksonville 3, Raleigh, Louisville 2, Baltimore 1, Minneapolis 1, Minneapolis 2, Minneapolis 3 and Columbia development property investments.|
Subsequent Events include:
|◾||Entered into a definitive merger agreement with an affiliate of NexPoint Advisors, LLC (“NexPoint”), in an all-cash transaction valued at approximately $900 million, including debt and preferred stock to be assumed or refinanced. Under the terms of the merger agreement, holders of JCAP's common stock will receive $17.30 per share in cash. Jernigan Capital's Board of Directors has unanimously approved the transaction.|
|◾||Acquired 100% of the Class A membership units of the LLCs that own the New York City 2, Orlando 3 and Denver 1 development property investments. With these acquisitions, the Company now wholly owns 40 facilities on its balance sheet or in its SL1 Joint Venture, representing approximately 53% of its total portfolio by net rentable square feet.|
|◾||Received repayment of the Boston 3 development property investment totaling $2.9 million, one of the five previously announced forgone investments.|
Total revenues for the quarter ended June 30, 2020 were $11.7 million representing an increase of $0.8 million, or 8%, over total revenues for the quarter ended June 30, 2019. Total interest income from investments for the three months ended June 30, 2020 was $6.8 million, a decrease of approximately $2.3 million, or 26%, from the three months ended June 30, 2019. The decrease is primarily attributable to a decrease in the principal amount of development loans and bridge loans outstanding as a result of the Company’s acquisitions of developer interests in 23 additional self-storage facilities. At the same time, rental revenue was $4.8 million for the three months ended June 30, 2020, an increase of $3.2 million, or 194%, over rental revenue of $1.6 million reported for the same period in 2019. This increase is the result of the Company’s acquisition of the developers’ interests in 23 facilities since April 1, 2020, along with increased property net operating income on existing real estate owned resulting from higher occupancy and rental rates.
For the first full quarter, the Company no longer incurred fees to its former external advisor, JCAP Advisor LLC, as a result of the Internalization transaction on February 20, 2020. Total general and administrative expenses for the three months ended June 30, 2020 were $3.5 million, a decrease of $1.0 million, or 22%, from the three months ended June 30, 2019 (which included $2.1 million of fees to manager). There was an increase in certain elements of general and administrative expenses primarily stemming from annual compensation increases and additional headcount. On a quarter over quarter basis (second quarter 2020 compared to first quarter 2020), total general and administrative expenses declined approximately 13%, from $4.0 million in the first quarter 2020 (which included $1.2 million of fees to manager) to $3.5 million in the second quarter 2020. Compensation and benefits included non-cash expense of stock-based compensation of $0.8 million for the three months ended June 30, 2020 and 2019.
The Company incurred a net unrealized gain on investments of $0.8 million for the three months ended June 30, 2020, compared to a net unrealized gain of $12.0 million for the comparable period in 2019. The decrease compared to prior year, is primarily driven by the fact that fewer properties have attained certificates of occupancy in 2020 and there has been an increased pace of acquisitions of developers’ interests since June 30, 2019. In addition, the reduction in the fair value increase was also driven by elongated economic stabilization timelines (i.e., slower physical lease-up and lower realized rates) of the majority of the underlying properties in the Company’s development investment portfolio caused primarily by the COVID-19 pandemic and the ongoing impact of new supply. Net unrealized gain on investments was $0.8 million in the second quarter of 2020 as compared to net unrealized loss on investments
The following information was filed by Jernigan Capital, Inc. (JCAP) on Thursday, August 6, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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