Grocery Store Feasibility Study in the San Francisco-Oakland-Fremont, CA Metro Area

Grocery lending far above the national weight

The Bay Area leans on grocery lending far harder than the country does. A location quotient of 2.69x and a rank of 3 of 412 for grocery store loans say as much, and the $680,000 median loan is 1.93x the class's national median. Inside the metro, though, grocery stores are just 6 of 39 classes. SBA approved 149 loans between FY2017 and FY2026, worth $136.3 million, with the central half running from $200,000 to $1.3 million. All are independent, with a franchise share of 0.00%.

The 504 role

SBA 7(a) supplied 121 loans and SBA 504 supplied 28, a notable share for a retail class, pointing to property purchases. The Mortgage Capital Development Corporation holds 19 of the 504 loans, worth $30.6 million. Alameda County holds 51 loans, San Francisco 37, Contra Costa 33, San Mateo 21 and Marin 7. FY2021 stood out with 26 loans and $33.1 million, against 8 loans in FY2017.

7(a) holders

U.S. Bank, National Association leads with 25 loans and $19.0 million. Open Bank and Northeast Bank (ME) each hold 9, though Open Bank's $6.9 million is far more than Northeast Bank's $1.8 million. Bank of Hope and Zions Bancorporation, National Association hold 6 each. The holder shown is today's, perhaps not the originator, and the table says nothing of any lender's view of grocers.

Cancellations and the missing rates

Cancellation after approval reached at least 13.9% for the FY2017 to FY2024 years. Two companion rates never reach the page because the source finds too few loans behind them; for grocers they are unknown, not nil. Grocery loss evidence must come from the state and national pages.

Testing a Bay Area grocery store

Grocery margins are thin and rent and labor in this metro are high, so a study has to show sales per square foot that the specific neighborhood supports and the competing chains and specialty stores within reach. Refrigeration, stock and any building purchase need testing against the $680,000 median. Coverage should be run with a sales shortfall and a margin squeeze together. Supplier terms and shrink are worth explicit lines. The appraiser will test whether the sales needed to carry the debt are realistic. Marin, San Mateo and the other counties are mapped to areas as of July 2023.