SBA 7(a) Flex Space Feasibility Study in Ohio

Ohio flex and small commercial buildings

SBA reports flex space inside a broader class of nonresidential lessors, and Ohio ranks 3rd among states for it by loan count. Over FY2017 to FY2026 Ohio records 64 loans worth $43.8 million. A $322,000 median is 0.54x the class nationally, and the heart of the range runs $167,550 to $873,500. Inside Ohio the class holds 19th place of 39, and franchise brands are minor at 3.1% of loans. Small tickets on investor buildings are what set Ohio apart from the national lessor record.

Few lenders, a few counties

Of the 13 loans at The Huntington National Bank, the total is $7.1 million; Telhio Credit Union Inc has 6 and $3.1 million. Franklin County has 12 loans, Cuyahoga 9, Hamilton 7, Lucas and Summit 4 each, Muskingum 3, and Butler, Clermont, Licking and Mahoning 2 each. The file is spread among Ohio's major counties without a single dominant market, so a sponsor can usually find a local comparison for a small investor building in a metro area, though rural precedent is thinner.

A lessor class with a lending cliff

SBA's lessor lending nearly stops from FY2024, a break the annual record makes plain: 12 loans and $6.8 million in FY2017, 16 and $9.1 million in FY2021, and only 2 loans for $180,000 in FY2026. Readers should therefore treat the full-period totals as a picture of earlier years, not the current market. Cancellation after approval is floored at 11.5% with an identical ceiling. The 42 early loans that funded show 0.00% charge-off to date and on the five-year measure, a floor.

What the study must test

A flex building is leased space, so the study must test the lease market, not the borrower's own sales. That means vacancy and rents for comparable flex, office and retail buildings in the submarket, the tenant mix and lease terms, the cost of tenant improvements and leasing commissions, and whether net operating income covers debt service at a realistic vacancy. A loan near $322,000 suggests small buildings, so a few vacancies can change the coverage sharply. On coding, flex buildings share their industry entry with office and retail lessors and with banquet hall rental, so none of them can be isolated. The appraisal values the property on its income.