SBA 7(a) Self Storage Feasibility Study in Washington

Storage in Washington is a large-ticket class. A $1.3 million median is 1.37x the national 7(a) benchmark, and half of the 40 loans fall from $631,050 to $2.3 million. Total dollars reach $70.3 million for FY2017 to FY2026, which makes the average loan nearly twice the median and suggests a few very large projects. Washington ranks 14 for storage on loans counted, and storage is 20 of 39 inside the state. Franchising is 2.5% of loans.

A lender concentration

Live Oak Banking Company accounts for 17 loans and $45.9 million, the bulk of the dollar total, while BMO Bank National Association has 5 and $4.9 million. The tally covers loans each lender holds or held, with no bearing on how either one lends. For a borrower, the pattern means that large storage projects in the state have mostly come through one specialist channel. Counties are widely scattered: Spokane 5, Jefferson and Thurston 4, Clark and Kitsap 3, and Chelan, Douglas, King, Pierce and Snohomish 2.

The two empty years

Approvals were 4, 6, 2, 8, 7 and 8 from FY2017 to FY2022. Then FY2023 and FY2024 show no loans at all, and FY2025 and FY2026 only 2 and 3 with $3.5 million and $1.7 million. The drop after FY2022 is steeper than in most cells, and a study should ask whether it reflects the rate environment or construction costs. At minimum 5.7% of approvals up to FY2024 were cancelled, a share that the broader count leaves alone.

Charge-offs and coding

Charge-off data are absent because the funded cohort is thin. The class cannot separate RV and boat storage, which has no code of its own, from conventional storage, so some loans may finance outdoor vehicle lots.

Washington storage study questions

A storage study depends on supply: square feet of climate-controlled and drive-up space already in the submarket, rents and occupancy at competitors, and household growth near the site. It should test construction cost, zoning and permitting, the lease-up period from opening to stabilization, and the rent level needed for coverage at a loan this large. Because storage is real estate, the appraisal is central, and the study should show value on completion and on stabilization, including a downside rent case.