SBA 7(a) Self Storage Feasibility Study in Minnesota

Live Oak at the head of a small list

Among Minnesota's SBA 7(a) classes, self storage ranks 24 of 39, and in the national ranking by loan count Minnesota is 25. The FY2017 to FY2026 tally is 26 loans and $19.4 million. The median of $555,000 is 0.57x the nationwide mark, and the middle loans range over $278,925 to $883,250. Franchise share is 15.4%. Live Oak Banking Company is listed with 10 loans and $12.9 million, and BankVista with 5 loans and $1.1 million, a stark gap in average size. Each entry names the holder SBA now lists, which is silent on what either bank asks of a borrower.

Anoka and the outstate counties

Anoka County has 4 loans, while Le Sueur, Mille Lacs, Olmsted, Saint Louis and Watonwan each have 2, and single loans appear in Aitkin, Blue Earth, Carver and Crow Wing. So the class is as much a small-city and rural product as a metro one. FY2019 stands out with 3 loans and $5.9 million. FY2021 reached 6 loans and $2.0 million, and later years show only 1 to 3 loans, with FY2025 holding 1 loan of $350,000 and FY2026 holding 2 loans and $2.7 million.

Coding and withheld rates

The coding has no line for RV and boat storage; such sites are filed as self storage or other warehousing, so a Minnesota project aimed at vehicles may be partly invisible here. Minnesota storage loans have no published cancellation or charge-off percentage, and the blank is not zero.

The study behind a Minnesota storage loan

Self storage lives on supply and demand in a trade area. The study should count existing facilities and their units, occupancy and street rates, then estimate the demand from housing, businesses and mobility patterns, with attention to the weather that sends boats and recreational vehicles into storage. It should show the build or purchase cost, the proportion of heated units to drive-up doors, and the fill-up schedule over the first years, which is the main risk for a new facility. A conservative lease-up case must still cover the payment. Management, marketing and reserve costs belong in the operating budget. An appraiser should explain how a storage property would be valued by a buyer, since investors, not operators, are the likely purchasers. Minnesota's climate makes heated units more valuable in some markets, and the study should show whether tenants there pay a premium that justifies the added build cost.