Jernigan Capital Inc., a merchant bank and advisory firm serving the self-storage industry, has reached its target capitalization of $122.2 million in a joint venture between an affiliate of real estate investment firm Heitman Capital Management LLC and a co-investment from an unnamed public-pension plan. The Heitman joint venture was launched on March 7 with a $35 million commitment from Heitman, which was contingent on a $75 million institutional co-investment, which has now been contributed by the pension plan, according to a Jernigan Capital press release. The money will be used to fund self-storage development investments.
As part of the joint-venture capitalization, Jernigan Capital also completed its contribution of three Florida investments with an aggregate committed principal of approximately $41.9 million. The investments include a future development in Fort Lauderdale and two in Miami. Jernigan Capital had already advanced $8.1 million against the $41.9 million commitment, leaving the Heitman joint venture to fund the remaining $33.8 million toward the self-storage projects, the release stated. Following the contribution, the joint venture now has $80.3 million remaining from which it can fund new self-storage investments.
“We are delighted to have completed the Heitman joint venture with a $75 million capital contribution from one of the preeminent investors in the world to go along with a $35 million commitment from Heitman, one of the leading real estate investors in the United States,” Jernigan Capital CEO Dean Jernigan said.
Income related to the joint venture is expected to be $1.2 million to $1.3 million this year, according to an investor presentation on the Jernigan Capital website.
“The Heitman joint venture provides us with efficient funding that allows us to continue closing high quality self-storage development investments from our robust pipeline at returns that should prove to be very accretive to our book value,” said John Good, president and chief operating officer for Jernigan Capital. “We have made good progress in structuring and documenting a $45 million credit facility that is expected to grow to $60 million as participants are secured. We expect the credit facility to close by the end of April. We are confident that these capital solutions will allow us to continue creating value through high-return self-storage development investments."
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.