SBA 504 Self Storage Feasibility Study in Michigan

Of the 53 loans in this 504 storage cell, 43 and $45.2 million of the $53.4 million sit with Michigan Certified Development Corporation, an almost complete dominance that separates the program from Michigan storage under 7(a) and from the 504 class nationally. Great Lakes Commercial Finance has the remaining 9 loans and $7.2 million. SBA's holder records give these counts and do not assess either company. The state is sixth nationally on loans counted, and storage is fourth of 39 among Michigan's 504 classes. Franchising is 1.9% of loans.

Loan sizes

The median is $650,000, 0.73x the national 504 figure for storage, and the central half runs from $357,000 to $1.3 million. These sizes are smaller than Michigan's 7(a) storage loans, which suggests that the 504 side finances modest facilities with the real estate as collateral. Kent County has 9 loans, Macomb and Ottawa 5, Calhoun, Genesee, Livingston and Oakland 3, and Barry, Clinton and Lapeer 2.

Years, including a blank

Approvals were 6, 6, 4 and 8 in FY2017 to FY2020, then 5 in FY2021 and 11 in FY2022, and 7 in FY2023. FY2024 shows no loans at all. FY2025 had 2 loans and $5.3 million, an average over $2.6 million, and FY2026 had 4 and $3.5 million. The empty FY2024 is the cell's most unusual year, and a study should ask what happened.

Cancellation and loss data

Cancellation took at least 19.1% of approvals through FY2024 with no change on the wider count, and roughly a fifth of approved projects not funding is a serious risk for a project loan. Charge-off data are not printed. Vehicle and boat parking is filed with ordinary storage, so the class cannot isolate it.

A Michigan 504 storage study

Because 504 finances the building and land, the study must set out how the real estate is valued on completion and on stabilisation, the construction budget, and the contingency for site work. It should compare rents and occupancy at competing facilities, estimate the lease-up period, and test debt service on both loan pieces if rents are lower than planned. With so many cancellations, check the stages where projects stall: zoning, utilities, construction pricing, and the borrower's cash injection. The study should say clearly which product, such as RV parking or conventional units, is being built.