Self Storage Feasibility Study in Florida

Big Florida storage loans, often cancelled

Florida's self storage lending differs from the class in loan size and in cancellations, and both clear our distinctness margin against Florida's all-class record and against storage nationally. Loan size is the first: the median approval is $1.4 million, which is 1.49x the national self storage median. Cancellation is the second: of the Florida storage loans approved in FY2017 to FY2024, at least 21.3% were later called off, a floor above the class nationally, and the ceiling reaches 27.0% once loans still waiting on disbursement are counted. Florida ranks 3 of 50 among states for the class, with 144 approvals worth $266.7 million in FY2017 to FY2026, even though at a location quotient of 0.78x storage weighs less in Florida's SBA lending than across the country; inside the state the class ranks 17 of 39.

A 504 market led by Live Oak and Florida development companies

SBA 504 carried 64 of the loans and 7(a) 80, a heavy real estate share. Among development companies, Florida Business Development Corporation has 27 loans worth $55.2 million, and its nearest rival, Florida First Capital Finance Corporation, Inc., holds 24 worth $42.4 million, and Sunshine State Economic Development Corporation and Independent Development Services Corporation at 7 and 6. Live Oak Banking Company dominates 7(a), at 41 loans and $103.9 million, with Bank Five Nine holding 16. Half the Florida storage approvals fall between $595,750 and $2.9 million. Franchise share is 6.3%. Lending is spread across the state: Lee County has 11 approvals, Hillsborough and Polk 10 each, Duval 8. FY2018 and FY2021 were the largest years, with 22 and 23 loans.

Funded loans have held

Once funded, Florida storage loans have performed. Of 67 disbursed in FY2017 to FY2021, a 1.5% floor is charged off, with nothing lost in the first five years by the 0.00% measure, though that floor sits above storage nationally. The gap between the cancellation floor and its ceiling says a good number of recent approvals are still undisbursed, consistent with construction financing that draws down over a build.

For a Florida storage developer, the risk sits between approval and the first draw. A feasibility study should be prepared to the standard the lender and appraiser will apply before the commitment, so the deal does not fall apart afterwards. Demand has to be measured as rentable square feet per person in a realistic trade radius, with the facilities already open, under construction and permitted nearby, and with the absorption pace a new facility can expect. Cost covers land, site work, construction, climate control and any hurricane-related design requirements, at current bids, and the coverage of debt service needs testing month by month through lease-up, with rental rates and concessions realistic for the submarket. The appraisal will value the facility on stabilised income and on its value as is during lease-up, and the study's absorption schedule has to be one the appraiser can accept.

Boat and RV storage cannot be separated from self storage here; it lacks a code of its own, so it is filed either with self storage or with other warehousing.