Self Storage Feasibility Study in the Detroit-Warren-Dearborn, MI Metro Area

Self storage in Detroit: big loans in a lighter-than-national class

For self storage, the Detroit-Warren-Dearborn, MI Metro Area stands 6 of 513 nationally, a high national position, though inside the area it is 18 of 39 and the 0.76x location quotient shows it weighing less in local lending than across the country. Size is what distinguishes it: the median loan, $2.2 million, is 2.37x the nationwide median. Across FY2017 to FY2026 there are 33 approvals worth $69.6 million.

Programs, counties and the lender

Loans in the middle of the range reach from $466,000 to $3.3 million. Programs are nearly balanced, with 504 at 15 loans and 7(a) at 18. Macomb County holds 13 of the loans, while Livingston County and Oakland County each hold 6. Live Oak Banking Company is shown by SBA as holder of 8 loans totaling $28.9 million, a sizable block against the area's $69.6 million, and one that records custody rather than origination. The franchise share is withheld, and so is every year, because each year's count is small.

Limits of the class and of the rates

Self storage cannot be separated from RV and boat storage, a niche without an industry code of its own that lands in self storage or other warehousing. A project built mainly for RVs or boats therefore sits in the same figures as a unit-mix facility. Cancellation and charge-off floors are absent for this area, since Loan Analytics holds back a rate whenever the early cohort is thin; absent does not mean zero.

What a Detroit-area storage study must show

With a median of $2.2 million, this is a construction and land story, so the study should price land, site work and the unit mix separately and compare climate-controlled with drive-up space on cost and rent. Lease-up is the central risk: a new facility fills over a period of months or years, and the study needs a stabilization schedule with a slower case. It should map competing facilities within a short drive and list the rents they charge, as evidence the borrower can show a lender. Debt coverage during lease-up often depends on an interest reserve. An appraiser values the property on stabilized income, so spell out what stabilization requires.