IPO Report: Jernigan Capital (JCAP)

Francis Gaskins |

Jernigan_Logo.jpgJernigan Capital (JCAP) is a REIT, a commercial real estate finance company that lends to private developers, owners and operators of self-storage facilities.

JCAP is one of three new IPOs scheduled for this week. The full IPO calendar is available at IPOpremium.

JCAPscheduled a $100 million IPO on the NYSE. The market capitalization is $105 million at a price range midpoint of $20. The IPO is planned for Friday, March 27, 2018. The company is based in Miami, Florida.

Manager, Joint-managers: Raymond James; Baird; Wunderlich. SEC filings

Jernigan Capital (JCAP) Conclusion

Neutral minus

Funding of incoming mortgages depends on a successful IPO

No rev or earnings, dividend not specified

Pre-IPO JCAP has capital of $1000

Selling 95% on the IPO

Jernigan Capital (JCAP) Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Jernigan Capital (JCAP)

$105

no rev

no earnings

1.1

1.1

95%

             

Jernigan Capital (JCAP) Business

JCAP intends to originate a diversified portfolio of development, acquisition, and refinance loans secured by self-storage facilities primarily in the top 50 United States metropolitan statistical areas.

Jernigan Capital (JCAP) Initial portfolio

Since October 2, 2014, JCAP entered into term sheets to provide the loans using substantially all of the net proceeds of this offering.

The term sheets are non-binding and remain subject to entry into definitive agreements with respect to the loans. There can be no assurance that the loans will close on the terms anticipated, or at all.

Subsequent to the closing of this offering, JCAP anticipates funding an initial loan portfolio, consisting of 15 loans in the aggregate principal amount of approximately $122.7 million.

Development loans: $117mm, 6 year 6.9% loans with a 50% equity participation.
3 stabilized asset loans, 6 year 6.9% loans with no equity.

Jernigan Capital (JCAP) Market Conditions

JCAP believes that present market conditions are favorable for realizing attractive risk-adjusted returns on investments in self-storage facilities owned by private operators.

While construction in the self-storage industry remains low compared to historical averages, the industry is seeing increased construction starts recently and the trend is expected to continue upwards.

In addition, the number of transactions has been increasing, fueled by investor appetite for self-storage’s cash flow performance. The key demand factors of the self-storage industry include population mobility and new job creation, both of which are experiencing increases since the recession.

These factors have created demand for self-storage, which in turn has developers looking to develop and match demand with supply. The main deterrent for developers is the lack of financing.

Jernigan Capital (JCAP) Competition

A number of entities compete with JCAP to make the types of investments that JCAP seeks.

JCAP competes with a variety of institutional investors, including other REITs, specialty finance companies, public and private funds, commercial and investment banks, commercial finance and insurance companies and other financial institutions.

Several other REITs have raised, or are expected to raise, significant amounts of capital, and may have investment objectives that overlap with JCAP's, which may create additional competition for investment opportunities.

Many of anticipated competitors are significantly larger than JCAP and have considerably greater financial, technical, marketing and other resources than JCAP.

Jernigan Capital (JCAP) 5% Shareholders Pre-IPO

Dean Jernigan, 100%

Jernigan Capital (JCAP) Dividends

Not specified

Jernigan Capital (JCAP) Use of proceeds

JCAP expects to receive $92 million from its IPO and $5 million from a concurrent private placement.

JCAP intends to use substantially all of such net proceeds from this offering and the concurrent private placement to fund the loans identified and described as the Initial Portfolio.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
JCAP Jernigan Capital Inc. 19.94 0.01 0.05 49,624

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