For most of his life, Chris Jernigan has had a front-row seat at the self-storage show.
In 1985, at age 15, he paid his first visit to a self-storage facility when his dad had him sweep out units at a soon-to-open Storage USA facility in his hometown of Memphis, TN.
Jernigan is the son of Dean Jernigan, a veteran of the self-storage business who’s held high-profile leadership positions at Storage USA and CubeSmart. Since 2013, Dean has led his own publicly-traded self-storage investment firm, Jernigan Capital.
Not surprisingly, Chris followed his father into the family business, holding jobs at Storage USA, Jernigan Property Group (another of his dad’s previous companies) and Jernigan Capital. Chris was vice president of investments at Jernigan Capital until August 2016, when he decided to venture out on his own and form Topsy Storage Co., a self-storage development and consulting firm in Memphis.
Finding the best sites
As founder, president and the only employee of Topsy, Jernigan spends the bulk of his time finding development sites for clients, dealing with real estate brokers, putting sites under contract and ironing out entitlement issues. As compensation, Jernigan charges a consulting fee or acquires an ownership stake in a project. He’s not involved in design, construction or other subsequent phases.
“I’m very careful to make sure that I feel really good about a site I’m presenting [to a developer],” he said. “I wouldn’t want to do a deal just to be paid money and not have it be successful for someone. It’s a good feeling for me to help others be successful.”
Fortunately this #selfstorage development cycle, we are making use of the great technology & data available now. Will see less overbuilding.
— Chris Jernigan (@cjerniganCRE) July 26, 2017
Jernigan said that after more than 30 years in the self-storage business, he’s honed his ability to successfully nail down sites for new facilities.
“The real value in what I can do is sourcing sites,” Jernigan said. “I look at hundreds and hundreds and hundreds of sites to find one. Some of those I’m looking at a lot; some of them I’m just looking at for a second.”
Going against the grain
Jernigan said he’s got a knack for unearthing development sites that other self-storage professionals might have overlooked. But he often finds himself having to overcome objections about sites that he’s confident are a good fit.
“I am an intuitive, creative thinker and tend to see things others don’t see many times,” he said. “When you’re looking at sites, sometimes you have to go against the grain, against a lot of people.”
So far, Jernigan’s intuitive, creative thinking has led to one project that’s now under construction in Knoxville, TN. Jernigan Capital is an investor in the project, a self-storage conversion that will feature 758 units in 72,069 rentable square feet. Chris Jernigan said Topsy has other sites in the pipeline.
Data changes the game
As a self-storage consultant, Jernigan said he’s benefiting from a wealth of data, covering such areas as demographics and rental rates, that helps inform decisions about site selection — data that wasn’t available during the last development cycle, which came before the Great Recession. In fact, he said, Topsy could be viewed as a self-storage data company.
“When you really get down to it, self-storage is kind of a bunch of numbers, and you have to get all the right numbers together,” said Jernigan, who touts his flair for “looking between the numbers.”
Chris’ father commented on how new data sources are helping developers build smarter and more sustainably during a May conference call with Wall Street analysts.
“That data is getting better every day, as a matter of fact, as to where to build,” Dean said. “No longer does the developer have to do all the homework themselves or really go do the homework but have no way of checking that homework with a third-party data provider.”
New supply data is improving every day and helping us take a surgical approach to site selection. — Dean Jernigan (@deanjernigan) May 4, 2017
Riding the development wave
Chris Jernigan said that once the current development cycle subsides, he’ll apply his knowledge and skills to facility acquisitions, but he envisions that he’ll still be hunting for development sites.
For the time being, though, Jernigan is riding the self-storage development wave.
“I really am very, very focused on trying to find as many great sites for the remainder of this development cycle [as I can],” he said. “I have a pretty high standard on sites. I’m really looking for — to use a grading analogy — B-plus to A-plus sites.”
Jernigan said that in the current development cycle, he expects a peak in 2018 of facilities coming online, with the cycle then tapering off. Of course, development will continue after that, albeit at a slower pace.
“One thing that self-storage has proven in the last 30 years is that it’s very recession-resistant,” Jernigan said.