The Mandate
A regional storage developer with prior climate-controlled deliveries in the Carolinas engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a SBA 504 financing request for a project located in Wake County, North Carolina. Total project capitalization fell within the $10M-$25M band. The capital provider, a SBA Certified Development Company partnered with a national bank, required documentation consistent with current program review standards. The analytical question put to the team: Could Raleigh MSA household growth absorb 92,400 incremental climate-controlled square feet within a 30-month lease-up window.
Engagement Scope
- Primary market area defined as a 5-mile drive-time
- Comparable supply set of 14 properties
- Demand model framework: household-based square-foot-per-capita demand model
- Financial projection horizon: 10 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 5-mile drive-time from the subject site, calibrated to the demand catchment behavior typical of self-storage assets in North Carolina. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 14 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a household-based square-foot-per-capita demand model approach over a 10 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 1.8 across the projection window, with a stabilized capture rate of 5.6%.
Exhibit 1: Comparable Supply Set, North Carolina PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 10 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- Wake County added 22,400 households over the trailing 36 months against limited climate-controlled deliveries.
- PMA square feet per capita stood at 6.4, below the 7.5 saturation threshold for climate-controlled product.
- Subject reached 84% physical occupancy in month 28 of the absorption schedule.
- Stabilized 504 senior-debt DSCR of 1.42x cleared the program review threshold.
Deliverable
The delivered report ran 144 pages with 34 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the SBA Certified Development Company partnered with a national bank. The corresponding SBA 504 review framework guided exhibit selection and supporting documentation.