NexPoint Advisors has acquired Jernigan Capital, a large owner of and capital provider to self-storage facilities, for around $900 million in an all-cash transaction, the company announced. Jernigan Capital owns $514 million worth of self storage real estate properties, according to its most recent 10Q.
- Acquisition financing: JPMorgan Chase provided about $512 million in financing for the acquisition and future growth. Extra Space Storage, a self-storage REIT, also supplied $300 million in financing by purchasing preferred stock.
- Worth Noting: Extra Space’s preferred stock investment consists of a $200 million tranche, which will yield 10% and a $100 million tranche which will yield 12%. The company will assume management of 37 properties in connection with the investment. ‘
- Heard on the Street: Extra Space’s CEO Joe Margolis “Our $300 million preferred-equity investment in the acquisition of Jernigan Capital is another example of innovative capital investment in the storage sector, with attractive returns for our shareholders and an appropriate risk profile. We are excited to add 37 newly built, high-quality storage assets to our platform, and more importantly to begin new relationships with NexPoint and the JCAP management team.”
- Legal representation: Winston & Strawn represented an affiliate of NexPoint Advisors, L.P., while Latham & Watkins LLP represented Extra Space Storage in the transaction. [BusinessWire+]