Self Storage Feasibility Study in Texas

Texas leads, and borrows bigger

Texas is the largest SBA self storage market in the country, ranking 1 of 50 states with 245 approvals worth $390.4 million over the FY2017 to FY2026 span; its location quotient of 1.33x shows storage taking more of the Texas SBA book than of the nation's. What sets the cell apart is loan size. The Texas median is $1.2 million, 1.25x the national self storage median, and our screen finds that difference beyond the margin against both Texas lending across all classes and storage nationally. Half the Texas approvals sit between $636,300 and $2.1 million, the range of a ground-up facility or the acquisition of an established one.

Live Oak Banking Company dominates the 7(a) side as current holder of 70 Texas storage loans worth $145.2 million, and Bank Five Nine holds 38 worth $48.5 million; the 8 held by The Huntington National Bank come to $11.8 million and Plains State Bank's 6 to $10.8 million. SBA 504 carried 60 approvals against 185 under 7(a). Capital Certified Development Corporation leads Texas 504 storage holders with 19 loans worth $24.5 million, LiftFund, Inc. and Texas Certified Development Company, Inc. 10 each, and North Texas Certified Development Corporation 5 worth $10.1 million. Franchise brands are 5.3% of the count. Within Texas, storage ranks 16 of 39 classes.

Few losses, many unfinished deals

Texas storage loans that fund rarely fail: of 106 that funded in FY2017 to FY2021, only 0.94% have been written off, every one of them before year five, as the five-year rate also reads 0.94%. Both are floors. The weaker point is closing. Texas storage cancellations reached 14.4% for FY2017 through FY2024 approvals, and 16.8% if undisbursed loans are treated as cancelled; part of that spread may be construction loans yet to draw. Volume peaked at 54 approvals worth $77.6 million in FY2021, and FY2026 brought 26 approvals worth $64.8 million.

What a Texas storage study must test

Harris County holds 39 approvals, with Brazoria at 14, Montgomery at 12 and Galveston at 9, so the Houston region dominates the Texas record, followed by Dallas, Bexar and Collin counties. A feasibility study has to test supply as hard as demand: rentable square feet per resident in the trade ring, the facilities under construction or permitted nearby, and current street rates and concessions. The budget needs fresh Texas bids on buildings, climate control, paving and gate security, and a realistic lease-up period. Run debt service coverage through lease-up on the occupancy and rate the submarket supports, not on a stabilized pro forma. The appraisal must test the absorption assumption that drives value. A data caution: SBA files boat and RV parking either as self storage or as general warehousing, never under a code of its own, so a Texas project built around covered boat or RV spaces is only partly described here.