Self Storage Feasibility Study in California

California storage: large projects, heavy 504 use

California self storage loans are big. The California median was $1.4 million, which is 1.47x the national median for self storage, and the California median is what clears our margin against the California all-asset book and against storage nationally. California's quartiles run from $754,000 to $2.8 million, and the 145 approvals from FY2017 to FY2026 total $275.7 million. California ranks 2 of 50 among states for the class, yet storage is a small part of California's very large SBA book, with a 0.45x location quotient, and it ranks 23 of 39 among California asset classes.

The program split is nearly even: 74 loans under 7(a) and 71 under SBA 504, so California storage owners lean heavily on development company financing for land and buildings. The Mortgage Capital Development Corporation holds 18 loans worth $47.2 million, CDC Small Business Finance Corp. 11, AMPAC Tri-State CDC, Inc. 10 worth $35.7 million, Greater Sacramento Certified Development Corporation 6 and Bay Area Employment Development Company 5. On 7(a), Live Oak Banking Company holds 30 California storage loans worth $56.7 million, and Harvest Small Business Finance, LLC and Bank Five Nine 7 each.

California floors and the recent slowdown

Cancellation is the California risk. At least 14.6% of California storage approvals dated FY2017 to FY2024 fell away to cancellation, and the 18.5% ceiling shows that many recent approvals had yet to fund when the data was cut. Construction cost, entitlement and appraisal shortfalls are typical reasons a storage project stalls after approval. Funded loans have performed: no charge-off appears among the 81 California storage loans disbursed in FY2017 through FY2021, a 0.00% floor, five-year floor included. Lending peaked at 30 approvals worth $53.3 million in FY2021 and has since slowed to 6 in FY2025 and 9 in FY2026.

What a California self storage study must test

Sacramento County holds 16 approvals, Riverside 14, San Diego 10, San Bernardino 9, and El Dorado and Los Angeles 8 each. A feasibility study must measure storage supply per household in the trade area, the facilities already built and in the pipeline, and street rates and lease-up pace at comparable California facilities. Cost must be bid, including land, entitlement and construction. The payment test should hold through lease-up at a loan that can reach $2.8 million at the upper quartile. The California appraisal must value the facility on its stabilized income and as-is condition. One data limit: SBA gives RV and boat storage no separate code, filing it under self storage or other warehousing, so California's figures cannot isolate it.