Flex Space Feasibility Study in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area

A lessor class with a 23.3% cancellation floor

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD shows 23.3% of nonresidential lessor approvals from FY2017 to FY2024 as later cancelled, a floor, and counting undisbursed loans as cancelled gives the same 23.3% as a ceiling. Investor-owned flex, office and retail buildings make up the class, and Philadelphia's metro has 30 such loans, $18.9 million in all, spread over FY2017 to FY2026. Median size is $410,000, 0.68x the national class figure, and half of the loans fall from $250,000 to $981,250. The metro stands 8 of 312 in the ordering by area, the class is 19th of 39 within it, and the location quotient reads 1.00x.

Eligibility is the first hurdle

Passive status is how SBA sees most lessor businesses, and that status makes them ineligible; approvals in this class nearly stop from FY2024. The printed years show that arc: FY2018 has 5 loans and $2.2 million, FY2021 has 6 loans and $2.9 million, FY2022 has 8 loans and $5.1 million, and FY2024, FY2025 and FY2026 print nothing: 0 loans and $0, FY2026 being a complete year. Too few loans stand behind FY2019, FY2020, FY2023 and FY2017 to print them, and none is zero.

Holders and the shared code

All 30 loans are SBA 7(a), none is SBA 504, and no loan is franchise-affiliated (0.00%). Trenton Business Assistance Corporation holds 6 loans worth $925,000 in SBA's reporting, and Montgomery County, PA has 6 loans; the first is a holding record that takes no view of how the organization lends. Loan Analytics' own rule keeps the charge-off rate off the page: the metro's FY2017 to FY2021 total is under 30. Flex space is coded together with office, retail and banquet hall rental; the data keeps flex buildings undivided from the others.

What an investor-building study has to test

The study opens with eligibility: does the owner occupy and run the property, or lease it passively? If the answer is passive leasing, the loan may be out of reach, and the 23.3% cancellation floor shows how often approvals do not close. If the project is eligible, the study tests rents against comparable space, vacancy and rollover, expenses and reserves, and debt service on in-place income rather than projected income. A $981,250 request near the top of the central half has to be justified by that income, and the appraisal should reconcile with it. The metro is formed from project counties on the July 2023 map.