Self Storage Feasibility Study in Colorado

Colorado storage loans are large and 8.2% were cancelled

Colorado's self storage file shows large tickets and a low share of approvals cancelled. A median of $1.3 million is 1.38x the national figure for storage, and most requests run from $656,250 to $2.5 million. The 58 loans approved over FY2017 to FY2026 total $104.6 million, a rank of 16 of 50 among states, though storage ranks only 18 of 39 within Colorado and its location quotient is 0.88x.

Program mix, lenders and counties

SBA 7(a) carried 39 loans and SBA 504 carried 19, and franchise affiliation is 12.1% of loans. B:Side Capital leads the 504 side with 14 loans and $28.1 million. Live Oak Banking Company is the biggest 7(a) lender, with 16 loans worth $33.3 million, and Bank Five Nine follows with 5 loans worth $11.1 million. Weld County has 10 loans, Arapahoe and El Paso 6 each, Larimer 5, and Denver and Douglas 4 each.

Cancellations and charge-offs

Cancellation held to 8.2% for approvals dated FY2017 through FY2024, with the same 8.2% as the ceiling. For the 34 loans funded from FY2017 through FY2021, nothing has been written off, at 0.00%, and nothing failed in the first five years either; both are floors. Approval counts move around: 11 loans and $18.4 million in FY2021, only 1 loan in FY2023, then 4 loans worth $10.9 million in FY2026.

What Colorado storage borrowers need to show

With tickets this large, the study has to carry more weight on land and construction cost, entitlement timing and the competing facilities opening nearby. Rents need to be tested against recent supply, not just population growth. Coverage should be run at a conservative absorption pace, because a big building can take long to fill. The appraisal must support both an as-complete and an as-stabilised value. Of the 58 loans, 39 sit in the 7(a) program and 19 in 504, so a sponsor should say which structure the project fits and show that its equity, term and payment match it. A borrower on the 504 side should also expect the study to treat the building as a real estate investment, with land cost, construction cost and a lease-up period set out in the same schedule.

Camper and watercraft yards cannot be teased apart from ordinary self storage in this data; they are coded as self storage or as other warehousing.