SBA 7(a) Flex Space Feasibility Study in Arizona

Arizona flex-space lessor lending in SBA's records

In Arizona, SBA 7(a) approved 44 loans in the flex-space lessor class. Across FY2017 to FY2026 in Arizona that came to $44.9 million gross. Counting flex-space lessor loans, Arizona ranks 12 across states for flex-space lessor under this program, and flex-space lessor sits 17 of 39 among Arizona classes. A median of $866,600 is 1.45x of the national flex-space lessor median under SBA 7(a), so Arizona runs above the norm. For flex-space lessor in Arizona, the middle half spans $408,675 to $1.2 million, and franchise flags mark 2.3% of Arizona flex-space lessor loans.

Who holds the flex-space lessor loans, and where

The largest named flex-space lessor holder in Arizona is Enterprise Bank & Trust: 10 loans worth $9.5 million; behind it Sunflower Bank National Association, 7 loans ($10.3 million). Holders in Arizona are those SBA currently lists. The Arizona flex-space lessor county count starts with Maricopa at 35, Pima at 5, Coconino at 1, Mohave at 1, Yavapai at 1.

Timing of Arizona approvals

The Arizona flex-space lessor calendar shows 7 loans ($9.3 million) in FY2019, then in Arizona 4 in FY2020 ($5.8 million), and in Arizona 15 in FY2021 ($13.9 million), 3 in FY2023 ($4.2 million) and 0 in FY2024 ($0) against Arizona's peak of 15 in FY2021. FY2024 and FY2025 and FY2026 show no Arizona flex-space lessor approvals.

Flex-space lessor cancel and charge-off floors

In Arizona, approval did not always mean a flex-space lessor loan: of FY2017 to FY2024 Arizona approvals, at least 25.0% ended in Arizona cancellation, with 25.0% the ceiling if undisbursed flex-space lessor loans are added. The flex-space lessor cohort funded in Arizona is too small, so Arizona holds no stable charge-off rate for flex-space lessor loans in Arizona funded FY2017 to FY2021; Arizona withholds the rate, and Arizona lenders should not read it as zero.

Arizona flex buildings: what a study must prove

For an Arizona flex building the evidence is leasing data. A study should present rents and vacancy for similar flex, office and light-industrial space, name the tenant types the bay depths and clear heights will suit, and estimate how long stabilisation will take. Purchase or build cost belongs beside loans centred on $866,600, with coverage tested at slower lease-up and at a major tenant's departure. The appraiser values such a building on net income, so rollover and expense assumptions need documentation.

Arizona flex space and the break after FY2023

Flex is pooled with office, retail and banquet-hall lessors, and the class nearly stops from FY2024. A thin recent tail in Arizona tells a reader about the record, not about tenants.