Self storage looks simple to underwrite and rarely is. The revenue is thousands of small month-to-month agreements, the rate is managed dynamically, and supply can arrive within a three-mile radius faster than in almost any other asset class. What a lender wants is evidence that the trade area can absorb the square footage being added.
| Route | Where it fits | What it turns on |
|---|---|---|
| SBA 7(a) | Acquisition, working capital, equipment and some construction; the most flexible federal route for an operating business. | Size standards, owner-occupancy and repayment ability from the business itself. |
| SBA 504 | Owner-occupied real estate and long-lived equipment, in a bank plus CDC debenture structure. | Eligible fixed assets and the borrower contribution rules, which rise for a new business or a special-purpose property. |
| USDA OneRD / B&I | Projects in eligible rural areas, where the guarantee helps a lender hold a longer term. | Rural eligibility, tangible balance-sheet equity of 10 to 25 percent under 7 CFR 5001.105(d), and a feasibility study above $1,000,000 for a new business. |
| Conventional bank or credit union | Experienced sponsors with strong balance sheets, and projects too large for the federal ceilings. | Coverage, leverage, sponsor liquidity and the appraised value of the collateral. |
| Development | Ground-up facilities and conversions of existing industrial or retail buildings. | Zoning and entitlement, construction cost per net rentable square foot, and a lease-up curve the market supports. |
| Acquisition and expansion | Stabilised facilities, under-managed sites, and phase-two building additions. | Verified occupancy by unit type, rate history including concessions, and existing supply per capita. |
A storage market can go from undersupplied to oversupplied in eighteen months, because the development cycle is short and everyone reads the same data. Any analysis that counts only existing facilities is measuring yesterday’s market. Announced projects, permitted sites and conversions all belong in the supply figure, and the lease-up should be tested against the case where they open on schedule.
The second thing to test is rate. Street rates move constantly, and a projection built on today’s advertised rate without the concession structure behind it overstates revenue from the first month. Effective rate, net of concessions and adjusted for existing-customer increases, is the number worth projecting.
Our storage work is described at self storage feasibility studies.
Last reviewed September 2026. Programme figures are quoted from the sources below; everything else is professional commentary.
Independent supply, demand and lease-up analysis. Fixed fee quoted in one business day.
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Wert-Berater, Inc. is an independent provider of feasibility studies and other related services. The firm does not provide financing or equity investment advice, and does not arrange, broker, or place debt or equity capital of any kind.
All appraisal assignments are performed by Bruce E. Jones, MAI, ASA-GC, BCA, CMEA, a member of the Appraisal Institute since 2006, a staff member of Wert-Berater, Inc. and owner of Special Purpose Realty Valuation.