Dean Jernigan, the former CEO of self-storage real estate investment trust (REIT) CubeSmart, has launched Jernigan Capital LLC, a Miami Beach, Fla.-based merchant bank and advisory firm specializing in self-storage. The longtime storage executive is investing his own money to back loans and is in the process of recruiting a joint-venture partner to provide capital, according to “The Storage Facilitator,” an industry blog.
“I decided that all the things I’ve learned over the years being a borrower, I’d like to use as a lender,” Jernigan told the blog. “I think I have a unique perspective to offer many people out there looking to build, buy or refinance a facility.”
Jernigan’s self-storage experience spans more than 30 years, beginning as founder of Storage USA Inc. in 1984. That company eventually became the industry’s first publicly traded REIT. In 2006, he became CEO of U-Store-It Trust Inc. and ushered the company through consistent growth and a change in branding to CubeSmart. He officially retired from CubeSmart on Dec. 31.
Jernigan Capital will examine loans as low as $1 million for single storage properties, but Jernigan expects most loans to be between $8 million and $10 million, he told the source. The company will consider transactions in the top 50 U.S. metropolitan statistical areas (MSAs) for acquisitions and refinancing projects but narrow its focus to the top 20 MSAs for development loans. The company’s first deals are expected to be signed in March.
Jernigan’s timing is partly aimed at $10 billion in commercial mortgage-backed security loans he says are coming due in the next five years. With many self-storage assets built between 2005 and 2008 now underperforming, he believes those operators won’t be able to refinance through traditional programs.
“Many of these people will struggle to refinance their existing loan amounts,” he told the source. “My plan is to be a source for those people.”