SELF-STORAGE PROPERTY FINANCING
Financing for Self-Storage Facilities.
Self-storage underwriting focuses on operating performance, occupancy, unit mix, market supply, management and the borrower’s business plan. Stabilized facilities and lease-up projects can require very different structures.
Where This Financing Can Fit
Financing may apply to acquisitions, refinances, stabilized facilities, expansion and certain value-add or lease-up situations.
Because storage performance can change quickly, lenders may pay close attention to physical and economic occupancy, rental rates, concessions and recent operating trends.
What We Evaluate
Unit count and mix
Physical and economic occupancy
Rental rates and concessions
Historical income and expenses
Market supply and competition
Borrower experience and business plan
The Structure Depends on the Deal
Self-Storage transactions can range from stabilized conventional requests to situations involving vacancy, renovation, business occupancy or a changing income profile.
Lee Commercial Capital evaluates the property, borrower and objective before narrowing the financing channels.
Common Self-Storage Transaction Scenarios
Stabilized acquisition
Historical operations and durable occupancy drive the analysis.
Lease-up facility
Current performance and the path to stabilization both matter.
Expansion
Existing operations, construction budget and added supply are evaluated together.
Value-add
Management changes, rate optimization or capital improvements should be supported by a clear plan.
What to Have Ready for an Initial Review
Property: unit mix.
Operations: occupancy reports.
Transaction: rent roll or management reports.
Borrower: trailing income and expenses.
Supporting information: purchase price or value.
Details: requested financing.
Information: market information.
Information: borrower experience and liquidity.
Questions That Often Matter on a Self-Storage Deal
Does self-storage use the same occupancy measure as apartments?
Not exactly. Physical occupancy and economic occupancy can tell different stories, so both may matter.
Can a facility still in lease-up be financed?
Potentially. The appropriate structure depends on current performance, market support and the stabilization plan.
Does management experience matter?
It can. Operating strategy and demonstrated ability to manage the asset may influence underwriting.
Financing a Self-Storage Property?
Send us the property, requested financing amount, occupancy or income information, and timing. We’ll start with the transaction.
Discuss Your Deal