Parking Garage Feasibility Study in California

California leads the country

California is the standout market for parking lending in the SBA files. From FY2017 to FY2026 the agency approved 32 loans for parking lots and garages in the state, worth $36.4 million, and the state ranks 1 of 33 for the class. The location quotient of 1.81x shows the category taking a larger share of California approvals than of the national book, yet within the state parking sits at 31 of 39 among asset classes, so it remains a niche. The median loan of $700,500 is 2.12x the national median, which is the second mark of distinction: California parking loans are more than double the size of a typical one elsewhere.

Why the tickets run large

Half of the loans fall between $295,300 and $1.6 million, a wide band that reflects land and structure costs in coastal metros. SBA 7(a) carried 25 of the loans and SBA 504 carried 7, a larger 504 presence than most small-business classes show, consistent with real estate being the heart of the asset. The franchise share is 0.00%, so this is a business of independent operators and landholders. Los Angeles County accounts for 15 loans and Riverside for 7, with Orange, San Diego and San Francisco at 2 each. Approvals have bounced between none in FY2020 and 6 in FY2018 and FY2022, so a reader should not extrapolate a trend.

Lenders and outcome floors

Enterprise Bank & Trust leads the 7(a) list with 10 loans worth $6.1 million. As the page states, these come from SBA's files on each loan's present holder, which says nothing about any lender's approach to the class. Neither outcome rate is printed for California parking, because too few loans stand behind each cohort, and withheld never means zero; a lender weighing a parking request should look at outcomes for the wider land-and-structure categories instead. A limitation affects the counts as well: truck parking cannot be separated from car parking in the industry code they share, so some of these loans may serve truck lots.

What a California parking study must show

A study for a lot or garage should test demand by use: commuters, event traffic, airport or hospital proximity, and the rate and occupancy those users will bear. It must price land, entitlement and construction against a loan size that is more than twice the national norm, then show debt service coverage under a low-occupancy case, since revenue is exposed to remote work and to changes in nearby development. Zoning and city fees deserve a line of their own. The appraisal will usually capitalise net operating income, so the income forecast has to survive the capitalisation an appraiser would apply to a parking asset.