Jernigan Capital JV Makes NC Self-Storage Investment

The 756-unit property will provide all climate-controlled storage in the rapidly growing Brier Creek community in Raleigh.
Dean Jernigan, CEO of Jernigan Capital

Dean Jernigan, CEO of Jernigan Capital

Raleigh, N.C.–An $8.9 million development investment in a multi-story Raleigh storage facility is the latest self-storage deal by Jernigan Capital, Inc. through a joint venture with Chicago-based Heitman Capital Management.

Jernigan Capital, a Memphis-based self-storage lending REIT, said the investment was made through Storage Lenders I LLC, the company’s joint venture with Heitman and an institutional partner. Phillips Development and Realty LLC, of Tampa, Fla., is the developer of the proposed project. It is the first self-storage development co-investment for Jernigan Capital and Phillips. The 65,110-square-foot, 756-unit self-storage property will provide all climate-controlled storage in the rapidly growing Brier Creek community in Raleigh.

With this investment, the Heitman joint venture is fully committed, according to Jernigan Capital. In early April, the REIT announced that an unidentified large public pension fund was committing $75 million to the previously announced joint venture between Jernigan Capital and a Heitman affiliate.

“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 world,” Dean Jernigan, chairman & CEO of Jernigan Capital, said in an April 5 prepared statement about the joint venture. “The quality of our partners in this joint venture highlights the tremendous opportunity our business model presents for our stockholders, self-storage entrepreneurs looking to take advantage of the unprecedented fundamentals of the self-storage sector and our talented JCAP team.”

At that time, Jernigan Capital had completed the contribution of three existing development property investments aggregating $41.9 million of capital commitments and advanced an aggregate of $8.1 million against the $41.9 million. The Heitman joint venture was to assume the obligation to fund the remaining $33.8 million of commitments toward the projects, which were all in the Miami-Fort Lauderdale MSA in Florida. As of early April, the partnership had $80.3 million of remaining capital to fund new self-storage investments.

Jernigan, who has more than 30 years in the self-storage business, started Jernigan Capital, which provides debt and equity capital to private developers, owners and operators of self-storage facilities, a year after he sold CubeSmart in 2013. He had previously launched Storage USA in 1984 before selling that in 2002.

The company announced earlier this month that a new 649-unit facility in North Haven, Conn., would be managed by CubeSmart. Jernigan Capital holds a $6.9 million investment and 49.9 percent profits interest in the facility, according to a company release.

CubeSmart will also manage 256 additional units at an existing Ocoee, Fla., facility it already runs. Jernigan Capital invested $5.1 million in the new units at the Ocoee property.

That announcement was made in November, when Jernigan Capital also stated it was investing $7.5 million in a proposed 784-unit facility in Jacksonville, Fla., that was being built by PLG Properties LLC of Georgia. It was the first development deal for Jernigan Capital and PLG Properties.

Jernigan had referred to the company’s fourth-quarter plans in comments made in the third-quarter earnings report released Nov. 2. “With the final investment identified to complete the Heitman joint venture, we are excited about our planned deployment of capital in the fourth quarter into new state-of-the-art self-storage projects,” Jernigan said in the earning release.