Jernigan Capital Inc., a merchant bank and advisory firm serving the self-storage industry, announced its board of directors has authorized a share-repurchase program for up to $10 million of the company’s outstanding shares of common stock, which is approximately 11.6 percent of the market value when trading closed on May 20. All repurchased shares will be immediately retired and become authorized-but-unissued shares, according to a press release.
"Our board of directors believes that our current share price reflects a dramatic discount to the intrinsic value of our portfolio of investments in state-of-the-art self-storage developments in some of the top markets in the United States," said Dean Jernigan, chairman and CEO. "The dollar amount of this share-repurchase program, if fully executed, is the equivalent of a single investment in a new development project. We believe the return on purchasing our own common stock at these prices significantly exceeds the strong return we would otherwise recognize on an equivalent amount of capital invested in one additional development project, making this a compelling step to creating shareholder value."
The company will repurchase shares at times and prices considered appropriate by management. The number of shares and timing of the repurchases will depend on market conditions and other factors, the release stated. No minimum repurchase amount can be guaranteed, officials said.
In related news, the lender also declared a cash dividend of $0.35 per share of common stock for the second quarter. The dividend is payable on July 15 to stockholders of record on July 1.
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.
- BusinessWire: Jernigan Capital Announces Share Repurchase Program