Self Storage Feasibility Study in Alabama

A class with a wide cancellation range

Self storage is far more prominent in Alabama lending than in the national mix: the location quotient is 2.60x, with the class placed 12 of 39 inside Alabama and the state placed 20 of 50. Across the whole FY2017 to FY2026 window, SBA approved 47 loans and $54.8 million. The median loan of $703,800 is 0.76x the nationwide level, and loans cluster from $347,500 to $1.6 million. Cancellation is the largest risk signal on the page. The floor is 18.4% for earlier approvals through FY2024, and the outer bound is 23.7%, so a sizeable block of approvals never reached funding.

Programs and lenders

SBA 7(a) supplies 31 of the loans and SBA 504 supplies 16, and franchising is rare at 2.1% of loans. Live Oak Banking Company currently holds 11 loans worth $21.8 million, a large average ticket, and Bank Five Nine holds 5 worth $3.3 million. On the 504 side, Southern Development Council holds 6 loans and $5.1 million. Each lender named is the holder SBA reports today, not necessarily the party that first approved the loan. Mobile County has 8 loans, Madison and Montgomery 5 each, and Tuscaloosa 4, so no single county dominates the record.

Reading the cancellation range

The floor of 18.4% counts only loans SBA records as cancelled. The ceiling of 23.7% also counts loans still undisbursed as cancelled, so the gap between the two is the share of earlier approvals that had not yet been disbursed when the data was cut. A range this wide means the true rate is not pinned down, and a lender should treat the floor as the minimum. Loss experience is left out, since the pool of storage loans funded from FY2017 to FY2021 is below 30, and Loan Analytics withholds a rate on fewer than 30 loans as its own presentation rule. A blank must not be read as zero.

Scope and the study agenda

Recreational vehicle and boat parking is not a category of its own here, because it has no code of its own and sits in the storage code or in other warehousing. A study for an Alabama facility should therefore define the unit mix: climate-controlled, drive-up, and outdoor vehicle spaces. It must measure competing supply nearby, absorption rates during lease-up, and test the rent per square foot that the market can bear. Debt service coverage must survive a slow fill. The appraisal should value the facility as a stabilised operation and as a partly leased one.