Alternative-investment firm NexPoint has launched NexPoint Storage Partners (NSP) to originate, execute, finance and manage self-storage investments. The new platform will provide debt and equity capital to entrepreneurs as well as acquire and develop its own properties in “dense and growing” U.S. markets, according to a press release. It’ll focus on “Generation V” assets, which it classifies as class-A, multi-story, climate-controlled facilities.
The move follows NexPoint’s $900 million acquisition of Jernigan Capital Inc. (JCAP), a merchant bank and advisory firm that also owned self-storage assets. Former JCAP CEO John Good will join NSP in the same role. He’s joined by eight other former JCAP employees who’ll comprise the platform’s core team. They intend to continue the investment approach used at JCAP while leveraging the resources and expertise at the parent company, particularly in real estate financing, product strategy and distribution, the release stated. Its lending strategy is to eventually own the facilities it finances through partner buyouts and right-of-first-refusal provisions.
“NexPoint Storage brings together deep knowledge of the self-storage industry—especially around GenV facilities—with a sophisticated real estate investment platform to capture a multitude of opportunities in the self-storage space,” Good said. “We expect to see significant transaction volume in the next few years, stemming from the most robust self-storage development cycle in the history of the sector; and NexPoint Storage is well-positioned in that environment to significantly expand our portfolio of GenV facilities in top [Metropolitan Statistical Areas].”
NSP investments currently total about $1.1 billion across 69 total assets nationwide. The platform wholly owns a portfolio of 38 self-storage properties. All of its owned facilities will be managed by Extra Space Storage Inc., a publicly traded real estate investment trust (REIT) that last month made a $300 million investment in preferred JCAP stock.
“We have a strong multi-year partnership with [Good] and the former JCAP team, and are excited by the opportunities to grow and create value through NexPoint Storage over the coming years,” said Matt McGraner, NexPoint’s chief investment officer. “While the combination of NexPoint and JCAP alone is powerful, NexPoint Storage further benefits from the expertise of Extra Space, a major equity partner in the new business, and J.P. Morgan, which provided financing for its future growth.”
Based in Dallas, NexPoint is comprised of a group of investment advisers and sponsors, a broker-dealer, and a suite of related investment vehicles. The firm provides differentiated access to real estate and other alternatives through public and private REITs, tax-advantaged real estate vehicles, registered funds and other offerings. It has interests across multiple property types and is part of an integrated network of investment-management and financial-services businesses.