Warehouses & Self-Storage
Straightforward buildings, straightforward underwriting — and two asset classes lenders currently like.
Eligible properties include both single and multi-tenant buildings. We finance warehousing used for storage and distribution as well as self-storage facilities — two related but genuinely different businesses that happen to share a building type.
Warehouse and distribution
Industrial is among the more straightforward commercial property to finance. The buildings are simple, tenant improvements are modest compared with office or medical space, and re-tenanting a warehouse is usually quicker and cheaper than re-tenanting almost anything else. Lenders like that.
What they look at:
- Clear height. Modern distribution wants 28 to 36 feet and more. Older buildings at 18 to 22 feet serve a narrower tenant pool, which affects both valuation and terms.
- Loading. Dock-high doors, drive-in access and truck court depth determine what kind of operation can physically use the building.
- Location relative to freight. Proximity to interstates, intermodal facilities and population centers drives demand more than almost anything else about the property.
- Tenant mix and lease term. As with office, weighted average lease term and tenant credit shape the underwriting.
Self-storage
Self-storage underwrites differently, and it is worth being explicit about why. There are no leases in any meaningful sense — tenancies are month to month, and the entire rent roll can theoretically turn over in thirty days. In exchange, income is spread across hundreds of small tenancies rather than concentrated in a few, so no single departure moves the numbers.
Lenders concentrate on occupancy history rather than lease term, on the operator's ability to hold rates, and on local supply — self-storage is quick to build and a submarket can be oversupplied faster than almost any other asset class. Facilities with modern climate control and good security systems finance better than older exposed-drive-up product.
Both are financeable through most structures
Industrial and storage suit conventional permanent debt, SBA programs where the owner occupies the building, and construction financing for ground-up development. For owner-users in particular, industrial property plus SBA is one of the better combinations available in commercial lending.
Financing industrial or storage?
These finance well. Send the rent roll or occupancy history and we will come back with terms.