Self Storage Feasibility Study in Michigan

Michigan storage: an even split between 504 and 7(a)

Michigan is one of the leading SBA markets for self storage, ranking 7 of 50 states with 111 approvals worth $141.0 million from FY2017 to FY2026. Storage takes a bigger slice of Michigan's SBA lending than the nation's, at a location quotient of 1.18x, though inside Michigan it ranks only 17 of 39 classes. The Michigan median was $790,300, or 0.85x the national storage figure, and the middle half of Michigan storage approvals sits between $353,500 and $1.6 million. None of Michigan's median, cancellation or charge-off figures sits beyond our distinctness margin of both the Michigan all-asset record and storage nationally; the cell is set apart instead by how it is financed.

SBA 504 funded 53 Michigan storage loans and SBA 7(a) 58, a near-even split that reflects how often storage is a real estate purchase or construction. Of those 504 loans, 43 sit with Michigan Certified Development Corporation, worth $45.2 million, and Great Lakes Commercial Finance holds 9. For Michigan storage under 7(a), Live Oak Banking Company has 15 loans worth $42.7 million, ChoiceOne Bank 13 worth $18.0 million and Bank Five Nine 12 worth $16.6 million; The Huntington National Bank's 5 total just $1.1 million. Franchising is minor at 1.8%. The loans are spread across the state: Macomb County leads with 13 approvals, then Kent with 11, Genesee with 9 and Saginaw with 7. Volume swung hard, from 21 loans in FY2022 and $26.0 million in FY2023 to 4 in FY2024 and 3 in FY2025, before 10 loans for $21.9 million in FY2026.

Michigan storage outcomes

Michigan cancelled 14.3% or more of its storage approvals dated FY2017 to FY2024, with the same 14.3% as the ceiling. Construction budgets, zoning approvals and appraisals all move between approval and closing. Losses are absent: Michigan has charged off 0.00% of the 46 storage loans it funded in FY2017 to FY2021, and Michigan's five-year figure is 0.00% as well. These are floors on loans still open.

What a Michigan storage study must test

A Michigan self storage study proves demand within a short drive of the site: households, renters, new housing and the existing storage supply within a few miles, with rents and occupancy from competing facilities, which differ between Macomb or Kent and smaller markets such as Lapeer or Clinton. Cost testing covers land, site work, buildings, climate control and the lease-up period. Debt service coverage has to be shown at the occupancy and rent the facility can reach after lease-up, with enough reserve to carry debt while units fill. The appraisal is central for a 504 or construction loan: it must support the stabilised value and the value as it stands at completion, because a lender near $1.6 million is relying on the property.

One limit applies: Michigan RV and boat storage yards lack a separate industry code, so they are mixed into these self storage figures.