Grocery Store Feasibility Study in Florida

Florida grocers borrow far above the national ticket

Florida grocery loans are big and, so far, safe. The median approval is $720,000, 2.05x the national median for grocery stores, and the charge-off floor is 0.00%; our screen marks both the median and the charge-off rate as standing apart from Florida lending across every class and from grocery nationally, beyond the margin and sampling noise. Florida ranks 3 of 55 among states for the class, with 187 approvals and $239.6 million from FY2017 to FY2026, though grocery ranks only 16 of 39 among Florida classes and the location quotient is 0.61x. The quartiles stretch from $261,000 to $1.8 million: many of these are store purchases with the building.

Development companies carry the big deals

SBA 504 carries 37 of the loans, and Florida First Capital Finance Corporation, Inc. alone holds 26 of them for $62.9 million, with Florida Business Development Corporation adding 9 for $17.1 million. Under 7(a), with 150 Florida loans, TD Bank, National Association holds 20 for $6.9 million, while Regions Bank's 12 loans total $23.6 million and Metro City Bank's 11 total $23.4 million. Newtek Bank, National Association holds 10 for $3.3 million and City National Bank of Florida 5 for $10.2 million. Only 2.1% of loans involve a franchise, so these are mostly independent grocers. Miami-Dade County leads with 35 loans, Broward follows with 25, then Hillsborough with 20, Orange with 10 and Duval with 8.

No charge-off has yet hit the 58 Florida grocers whose loans funded between FY2017 and FY2021, a 0.00% floor both to date and within the five-year window. Cancellation is the visible risk, a floor of 13.4% on Florida's FY2017 to FY2024 approvals and a 16.4% ceiling counting undisbursed loans. Volume is rising: 10 loans and $9.2 million in FY2018, 26 loans and $38.0 million in FY2025, and 27 loans and $40.5 million in FY2026.

What a Florida grocery study must prove

At a ticket near $720,000, a Florida grocery study is both a property appraisal problem and an operating forecast. Demand starts with the households, incomes and shopping habits within the store's trade area and the competing supermarkets, discount grocers and specialty stores already there; Miami-Dade and Broward carry the heaviest lending. Cost testing takes in acquisition or construction, refrigeration and fixtures, and opening inventory. Debt service coverage should rest on realistic sales per square foot and gross margin, with shrink and labor costs, and in a 504 structure it has to carry both the bank note and the debenture. The appraiser has to value the Florida building apart from the grocery business, since a strong loss record does not guarantee the value of a grocery building.