Self Storage Feasibility Study in the Houston-Pasadena-The Woodlands, TX Metro Area

The country's leading self storage market in SBA's records

Houston tops the national ranking for self storage loans, 1 of 513, although within Houston's own mix self storage sits low, at 14 of 39. The location quotient is 1.56x. The median loan is $1.5 million, 1.67x the national class median. SBA approved 79 loans between FY2017 and FY2026, worth $153.6 million, with the middle half between $592,000 and $2.7 million.

Programs, franchising and counties

The program split is 61 loans for 7(a) and 18 for 504, with franchised facilities at 8.9%. Harris County holds 39 loans, Brazoria 14, Montgomery 12 and Galveston 9. The yearly series is spiky: 22 loans and $36.0 million in FY2021, a sharp rise from 8 in FY2020, against 5 in FY2023 and FY2024. FY2026 carried 7 loans with $26.4 million, the second largest dollar total in the series.

Holders of the loans

Live Oak Banking Company holds 18 7(a) loans worth $52.6 million, far ahead on both count and dollars. Bank Five Nine holds 11 worth $14.6 million and Plains State Bank 6 worth $10.8 million. Capital Certified Development Corporation holds 5 of the 504 loans, worth $13.1 million. SBA's holder column reflects today's records and carries no information on how any lender underwrites storage.

Cancellation and gaps

Cancellations of FY2017 to FY2024 approvals reach at least 15.4%. Loan Analytics withholds a ceiling and a charge-off rate on thin counts; neither is shown and neither is zero. A coding note applies: vehicle and boat storage lacks a code of its own and may be coded as either self storage or warehousing, so the totals need not match every storage facility.

Testing a Houston storage project

A storage study turns on supply: existing facilities and units in the trade area, their rents and occupancy, and the pipeline of competing projects. It should show absorption from fill-up through stabilization, with a slow case, since a new facility carries debt before it earns. Land and construction budgets need a test against the $1.5 million median, and the site's flood exposure and drainage should be checked. A lender will value the project on stabilized income, so the study should state the rent per unit and the occupancy it assumes. Given the 15.4% cancellation floor, entitlements and permits should be in hand before the loan is sought. Counties are assigned through the July 2023 list.