Self Storage Feasibility Study in Illinois

Illinois is a top-ten state with a below-average footprint

Self storage in Illinois presents a contrast. Its 79 loans, approved from FY2017 to FY2026 for $125.4 million, rank the state 10 of 50 by volume. Inside Illinois, though, storage places only 19 of 39, and its location quotient of 0.89x means a slightly smaller piece of Illinois lending than national experience. The class is large here because Illinois is large, not because lenders favour it. A median loan of $861,000 is 0.93x what storage borrows at the national midpoint, and typical requests land between $436,000 and $2.2 million.

Lenders and where the loans sit

SBA 7(a) accounts for 51 loans and SBA 504 for 28, with franchise affiliation at only 2.5%. Two certified development companies lead: Small Business Growth Corporation with 12 loans worth $7.5 million, and SomerCor 504, Inc. with 11 loans worth $19.9 million. The dollar gap shows that SomerCor financed bigger facilities. For 7(a), Live Oak Banking Company holds 22 loans and $55.7 million, well ahead of Bank Five Nine with 16 loans and $18.8 million. By county, Lake and Madison each have 12 loans, Cook has only 9, and La Salle has 6. Chicago's home county is not where this lending clusters.

Cancellation is the visible risk, repayment looks quiet

Cancellation hit at least 16.4% of the FY2017 to FY2024 approvals in Illinois, climbing to 19.4% once loans still waiting on disbursement are added. Storage projects often depend on zoning and a long construction schedule, so a commitment outliving its window is plausible, though the data gives no reasons. Of the 35 loans disbursed in FY2017 to FY2021, none show a charge-off so far at 0.00%, nor within five years of approval; remember these are floors drawn from a small group. Annual volume swings, from 12 loans in FY2021 to 3 in FY2023, then 9 loans and $28.0 million in FY2024.

What the study must settle

For an Illinois storage project, treat demand as a supply question: existing rentable space within a drive time, absorption of comparable new buildings, and whether climate-controlled and drive-up rents hold up. Construction cost needs a contingency that survives a delayed permit. Coverage must be tested at a lease-up pace slower than the sponsor hopes. Last, the appraisal of a new facility rests on stabilised income and an exit cap rate, and that conclusion must support the requested loan.

One boundary on the data: vehicle, trailer and boat storage lacks any separate code, so it is mixed in with ordinary self storage or other warehousing.