SBA 7(a) Self Storage Feasibility Study in Arizona

Arizona's self storage cell is dominated by one name. Live Oak Banking Company appears with 13 loans and $34.1 million, which is well over half of the cell's $56.8 million, and no other lender reaches the table. That concentration separates Arizona from its parents more than any size ratio does. The median loan is $1.2 million, 1.19x the nationwide 7(a) storage median, and the middle half spans $645,000 to $2.3 million across 36 loans. The tally is of loans the lender holds or held, and it does not characterise how Live Oak underwrites.

Rank, geography and brands

Arizona is 16th for storage when loans are counted nationally, and storage is 19 of 39 inside the state. Franchise share is 5.6%. Maricopa County has 11 loans, Pima and Yavapai 5 each, Gila 4, Mohave 3, Apache 2, and Cochise, Coconino, Graham and Navajo 1 each. The spread into Gila, Mohave and the northern counties says a number of loans finance storage outside the Phoenix and Tucson metros.

A stop-start history

FY2017 had 7 loans and $12.3 million, FY2018 only 3, and FY2019 a lone loan of $969,300. No loan was approved in FY2020. Then came 7 loans and $12.9 million in FY2021 and 8 and $11.0 million in FY2022, before volume fell to 2, 4, 3 and 1 loan. For a lender, the break in FY2020 and the thin FY2026 are reminders that storage borrowing tracks interest rates and construction cost closely.

Cancellation floor and loss data

At least 18.8% of approvals made through FY2024 were cancelled, and no extra loans were undisbursed to raise the ceiling. Loss data for charge-offs are not shown because the funded cohort is small.

Arizona storage study demands

Because recreational-vehicle and boat parking is classified with ordinary storage or with warehousing, the report must say which product the project sells. It should measure existing supply and rents within a drive time, the growth of households and the share of renters, construction cost including utilities and drainage, and the months to reach stabilised occupancy. Summer heat shapes the choice between climate-controlled and drive-up units. The appraisal should provide value as completed and as stabilised, and coverage should be tested on a rent drop.