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09 Nov 2020

Extra Space Storage (EXR) Makes $300 Million Preferred Equity Investment in Jernigan Capital (JCAP)


SALT LAKE CITY, Nov. 9, 2020 /PRNewswire/ -- Extra Space Storage Inc. ("Extra Space" or the "Company") (NYSE: EXR), a leading owner and operator of self-storage properties, announced today it made a $300 million investment in preferred stock of Jernigan Capital, Inc. ("JCAP") in connection with the acquisition of JCAP by affiliates of NexPoint Advisors, L.P. The previously announced acquisition was approved by JCAP stockholders on October 26, 2020, and closed on Friday, November 6, 2020.

Extra Space's preferred stock investment consists of a $200 million tranche, which will yield 10% per annum and a $100 million tranche which will yield 12% per annum, for a blended yield of 10.7% per annum. After five years, the preferred dividend increases annually if the investment is not retired by JCAP and includes prepayment penalties and make whole provisions if retired early. The investment also provides Extra Space with certain rights with respect to purchasing the properties of JCAP. Extra Space will assume management of 37 JCAP stores in connection with the investment.

Joe Margolis, CEO of Extra Space commented, "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. We look forward to exploring future opportunities to grow with these partners in the storage sector."

Transaction Advisors

J.P. Morgan served as financial advisor and Latham & Watkins LLP served as legal counsel to Extra Space in connection with this transaction.

About Extra Space Storage Inc.

Extra Space Storage Inc., headquartered in Salt Lake City, is a self-administered and self-managed REIT and a member of the S&P 500. As of September 30, 2020, Extra Space owned and/or operated 1,906 self-storage properties in 40 states, Washington, D.C. and Puerto Rico. Extra Space's properties comprise approximately 1.4 million units and approximately 147.5 million square feet of rentable space. Extra Space Storage Inc. offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. Extra Space is the second largest owner and/or operator of self-storage properties in the United States.

Thumbnail: Salt Lake City Utah Photo by Lukas Kloeppel from Pexels

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