SBA 7(a) Self Storage Feasibility Study in Louisiana

Louisiana storage loans run slightly above the national ticket

Self storage ranks 15 of 39 among Louisiana's SBA 7(a) classes, and the state stands 26 among states by loan count. FY2017 through FY2026 adds up to 25 loans and $37.9 million in gross dollars. The median of $1.0 million is 1.05x the national level for the class, and the central loans fall between $490,000 and $2.1 million, which is the scale of a purchased or built facility, not a handful of units. Franchise share is 8.0%. Storage is a real-estate loan under another name, and in Louisiana it is a sizeable one.

Live Oak and a regional bank

Live Oak Banking Company is listed with 9 loans and $21.0 million, while Bank Five Nine has 6 loans and $6.7 million. The first average is far larger than the second. These are the holders SBA shows today and do not describe lending practices. By area, Lafayette leads with 3, then Caddo, East Baton Rouge, Saint Tammany and West Baton Rouge with 2 each, and single loans in Acadia, Bossier, Calcasieu, Iberia and Iberville. The spread is wide and thin.

A lumpy calendar

FY2017 had 1 loan of $490,000. FY2018 had 3 loans and $4.3 million, FY2019 had none, and FY2022 was the busiest, with 7 loans and $7.9 million. FY2021 and FY2023 each had 4 loans, at $8.3 million and $9.9 million, large averages. FY2024 shows 0 loans and $0, FY2025 shows 1 loan of $1.1 million and FY2026 shows 3 loans and $3.3 million. Neither a cancellation percentage nor a loss percentage appears, since the cohort is thin; read neither as a statement of no cancellations or no losses.

Coding, and what the Louisiana study must show

A Louisiana boat or RV project is only partly captured, because that kind of storage is coded as ordinary self storage or other warehousing. Existing facilities, their occupancy and street rates should be counted first; then estimate demand from housing, businesses and the boating and recreational vehicle population, and examine flood exposure, which affects both site choice and insurance cost in this state. Build cost, the split between heated units and drive-up doors, and the lease-up schedule are the main variables, since a new facility fills over years. A slow fill must still cover the payment. An appraiser should explain how an investor would value the property, because storage trades on net income.