DALLAS— NexPoint, a multibillion-dollar alternative investment firm, announced today the launch of NexPoint Storage Partners (“NexPoint Storage”), a real estate investment platform dedicated to originating, executing, financing, and managing investments in the self-storage sector. Across NexPoint, self-storage investments total approximately $1.1 billion. NexPoint Storage is the product of NexPoint’s November take-private acquisition of Jernigan Capital (“JCAP”), a NYSE-listed self-storage REIT.
NexPoint Storage invests in newly built, multi-story, climate controlled, Class-A self-storage facilities—known as “Generation V” facilities—located in dense and growing markets throughout the United States. NexPoint Storage intends to continue and build on the investment strategy and approach employed at JCAP, while leveraging the resources and expertise at NexPoint, especially in the areas of real estate financing, product strategy, and distribution. NexPoint plans to develop investment solutions around NexPoint Storage, providing investors with unique access to investment opportunities in GenV self-storage facilities.
John Good, former chairman and CEO of JCAP, joins NexPoint as CEO of NexPoint Storage. In addition to leading NexPoint Storage, Good lends his many years of real estate, legal, investment, and capital markets experience to the firm in a senior advisory capacity. In total, nine former JCAP employees join NexPoint Storage, comprising the self-storage platform’s core investment team.
“NexPoint Storage brings together deep knowledge of the self-storage industry—especially around GenV facilities—with a sophisticated real estate investment platform to capture a multitude of opportunities in the self-storage space,” said Good. “We expect to see significant transaction volume in the next few years stemming from the most robust self-storage development cycle in the history of the sector, and NexPoint Storage is well positioned in that environment to significantly expand our portfolio of GenV facilities in top MSAs.”
NexPoint Storage provides debt and equity capital to self-storage entrepreneurs with a view toward eventual outright ownership of the facilities it finances through partner buyouts or right-of-first refusal exercises. Additionally, NexPoint Storage has the desire, intention, and capital to acquire and selectively develop GenV self-storage facilities.
NexPoint Storage has 69 total self-storage investments across the country, 38 of which are wholly owned facilities. Over 95% of those investments are located in the top-50 U.S. MSAs. The expansion in the self-storage sector is a natural extension of NexPoint’s continued growth in the complementary multifamily and single-family rental sectors; underpinning investment opportunities across all three real estate sectors are secular trends in mobility and population growth.
“We have a strong multiyear partnership with John and the former JCAP team and are excited by the opportunities to grow and create value through NexPoint Storage over the coming years,” said Matt McGraner, NexPoint’s chief investment officer. “While the combination of NexPoint and JCAP alone is powerful, NexPoint Storage further benefits from the expertise of Extra Space, a major equity partner in the new business, and J.P. Morgan, which provided financing for its future growth.”
Extra Space Storage Inc. (NYSE:EXR) (“Extra Space”), a leader in the self-storage industry and the top performing self-storage REIT over the last 10 years, made a $300 million preferred equity investment in NexPoint Storage. Known as a best-in-class operator, Extra Space will manage all of NexPoint Storage’s wholly owned facilities. In addition to Extra Space’s equity investment, JPMorgan Chase Bank, N.A. provided approximately $512 million of financing for NexPoint’s acquisition of JCAP and the future growth of NexPoint Storage through two separate secured credit facilities.