Case Study · Texas · RV & Boat Storage · SBA 504
RV & Boat Storage Feasibility Study, Texas — An SBA 504 Worked Case
This is how our independent feasibility study company and RV and boat storage feasibility consultant analyzed a new-build covered-and-canopy storage project underwritten to an SBA 504 credit, from installed-fleet and HOA-driven demand through the debt-service coverage a lender must document. It is a representative, anonymized worked example of the methodology — not a specific client deal — set on a roughly 500-space facility in a fast-growing Sun Belt submarket of a major Texas metro.
A covered-canopy toy-storage yard behind the rooftops.
A sponsor came to our feasibility study company with a ground-up RV and boat storage project and an SBA 504 lender that needed the projected cash flow independently tested before the bank and its Certified Development Company would commit. The subject is a roughly 14-acre parcel on the exurban edge of a growing Texas Sun Belt submarket, ringed by master-planned, HOA-governed rooftops that push large recreational vehicles off the driveway and into paid storage. The build program is about 500 spaces, led by covered canopy with a premium enclosed drive-up component and a modest open-lot tier — a format mix, not a single product, which is the crux of the whole analysis.
Because owner-operated storage is an active operating business rather than passive real estate — the owner controls entry, exit, and services — the SBA treats it as eligible for both 7(a) and 504, which inverts the multifamily rule where pure investment rental is generally ineligible.12 The lender's question here is not “what is the land worth” but “will this specific format, in this specific submarket, lease up and cover this specific debt.” Our scope was the independent demand, format-fit, competition, absorption, and debt-service analysis that supports the 504 credit, tested against the market rather than restated from the sponsor's own projection.
Installed-fleet and HOA-driven storage demand.
Storage demand tracks the durable installed base of vehicles owned, not this year's unit sales, and it is amplified by the master-planned, HOA-governed rooftops filling in around the site. The demand read starts with owners and off-site push, not a rate applied to a radius.
The national frame is a chronically undersupplied niche: industry researchers converge on roughly 25 million US households owning an RV, a boat, or both, against fewer than two thousand dedicated storage stores nationwide.13 Because an RV sits idle for the large majority of its life, that installed fleet, not the shipment cycle, sets storage demand, and it does not evaporate in a soft sales year.3 The local engine is regulatory as much as demographic: roughly 65 percent of new single-family homes are built under a homeowners association, and a widely cited industry estimate holds that about 85 percent of HOAs restrict RV parking, so the rig that cannot sit on the driveway has to sit somewhere.7 Texas Sun Belt submarkets show that push in the search data — Katy, Texas leads the nation at 13.39 RV and boat storage searches per 1,000 residents — and owners will drive 20 to 50 miles to a facility, so the catchment is a metro-edge band, not a three-mile ring.4
On that installed base, the master-planned rooftops, and the format mix the trade area will actually pay for, the model supports a stabilized blended achievable rate near $188 per space per month — well above the roughly $171 national all-type storage average, reflecting the covered and enclosed tilt2 — and a stabilized economic occupancy of about 92 percent, a level a genuinely undersupplied dedicated facility can reach and hold, but only after a graded lease-up, never on day one.16
| Demand driver | Basis | Supported figure |
|---|---|---|
| Trade-area rooftops (metro-edge catchment) | HOA-dense master-planned growth, ~3–4%/yr | Rising captive base |
| Off-site push | ~65% of new homes HOA-governed; ~85% of HOAs restrict RV parking7 | Structural demand |
| Installed fleet | ~25M US households own an RV, a boat, or both13 | Deep, durable owner base |
| Search-demand density | Katy, TX 13.39 storage searches / 1,000 residents, highest nationally4 | Sun Belt intensity |
| Achievable blended rate | Covered/enclosed-led format mix, format-specific rates5 | ≈ $188/space/mo |
| Stabilized occupancy | Undersupplied dedicated niche, >90% typical6 | 92% economic |
Installed-base, HOA, and format-rate logic grounded in Yardi Matrix, RVIA/NMMA, community-association, and directory data; see sources 1, 3, 4, 5, 6, and 7. Figures are illustrative of the engagement type.
An undersupplied niche, but a submarket that must still be counted.
Nationally, dedicated supply is thin — Yardi Matrix counted 1,937 completed stores against roughly 52,000 traditional self-storage properties — but the national shortage does not immunize any single Sun Belt node, so the competitive set is surveyed by format and by achieved occupancy, not assumed away.
The undersupply thesis is real and structural: Toy Storage Nation estimates the sector needs roughly five times its current dedicated supply to meet latent demand.13 But parts of Texas already show localized RV and boat rate weakness in overbuilt suburban nodes, and an open lot has almost no barrier to entry, so a first mover's rate can be competed away quickly.9 A rigorous study therefore surveys the standing set by format and by achieved occupancy, then scans under-construction, permitted, and planned stalls plus the invisible peer-to-peer supply that never shows up in the vendor databases.1
| Competitor | Prevailing format | Est. occupancy | Distance | Read |
|---|---|---|---|---|
| Competitor A | Open lot + some covered | ~95%, covered waitlisted | 6 mi | Nearest; covered demand unmet |
| Competitor B | Open uncovered lot | ~88% | 9 mi | Price-led, no cover or enclosure |
| Competitor C | Covered canopy | ~93% | 12 mi | Closest format comp; strong |
| Competitor D | Enclosed drive-up | ~90% | 14 mi | Premium, different growth node |
| Competitor E | Self-storage w/ few RV stalls | ~85% (RV stalls) | 5 mi | Incidental supply only |
| Competitor F | Open lot (permitted expansion) | ~80% | 16 mi | Watch: adding stalls into lease-up |
Competitive set surveyed for the engagement; anonymized. Achieved occupancy at real competitors, not per-capita saturation ratios, is the meaningful supply signal; permitted and peer-to-peer supply were scanned, not just the standing set.
The read is a submarket that is tight in exactly the formats the subject leads. The nearest facility runs near 95 percent with its covered spaces waitlisted, the closest true covered comp holds in the low nineties, and the only supply inside five miles is a self-storage yard with a handful of incidental RV stalls. The one flag is Competitor F's permitted open-lot expansion, which the absorption schedule accounts for rather than ignores. On balance the subject fills a covered-and-enclosed gap the standing set is not meeting, rather than splitting a saturated open-lot market — the distinction between a fundable project and a thesis-driven one.9
Texas macro: a demand tailwind with an oversupply caution.
The state backdrop is a tailwind for a metro-edge storage yard, tempered by how easily Texas adds supply. Texas is the nation's second-largest economy at roughly $2.9 trillion of GDP, and more than 90 percent of Texans live in metropolitan counties.
Texas held about 31.3 million residents as of July 2024 and continues to lead the country in in-migration, and its exurban Sun Belt edges — the master-planned bands where RV and boat ownership and HOA restriction overlap — are among the fastest-growing places in the nation.11 The state carries no personal income tax and, decisively for storage supply, no general Certificate of Need regime, so capacity is set by the market rather than a permit gate.11 That same freedom is why Texas leads the country in new storage supply, which is exactly why the feasibility test here is submarket- and format-specific rather than a wave-through of the national undersupply story.9 A durable Texas proof point sits in the record: the Carraway RV and boat facility in Magnolia held 97 percent occupancy from 2021 through 2024 while lifting base rent from $4.69 to $5.35 per square foot — the kind of achieved performance a defensible study leans on rather than a builder's pro forma.8
Two recent changes cut in the sponsor's favor. The Texas business personal property tax exemption rose to $125,000 per location effective January 1, 2026, easing the tax load on gates, cameras, and office equipment, and the SBA's combined 7(a)-plus-504 ceiling doubled to $10 million in mid-2026, enlarging bankable deal size for exactly this kind of ground-up build.12 Texas also ranks second nationally in SBA 7(a) volume and is served by six SBA district offices alongside statewide Certified Development Companies, so the 504 channel here is deep.12
Why the site captures the format premium.
Household income, ownership density, and the ring of gated communities all point the same direction, and the site's position converts that demand into leases at the covered and enclosed rates the pro forma needs.
The catchment carries a median household income comfortably above the level at which covered and enclosed storage — not just an open gravel lot — becomes an affordable habit for a $70,000-to-$250,000 coach or wake boat. That income profile is what supports the format mix; underwriting a premium format into a price-sensitive market, or an open lot into an affluent one that would pay for cover, is the single most common storage feasibility failure, and the site here sits on the right side of it.5
Position does the rest. The parcel sits on the metro-edge growth vector, directly adjacent to the master-planned, HOA-governed subdivisions that generate the demand — siting a facility next to the gated communities that prohibit home storage is the prime play, and it shortens the drive that would otherwise send an owner to Competitor A or C. Trailing counts understate the captive base in a submarket growing 3 to 4 percent a year, a common exurban distortion a careful study corrects for rather than extrapolates, and the adjacency is why the model credits covered and enclosed absorption rather than defaulting to the lowest-rate open tier.4
The SBA 504 structure.
Total project cost lands at $5.90 million. The 504 program is purpose-built for owner-occupied fixed assets and construction, which is why an owner-operated storage facility held for the long term routes here: a bank first mortgage, a below-market CDC/SBA debenture, and a 10 percent equity injection.
| Cost component | Amount |
|---|---|
| Land (~14 acres, exurban Sun Belt parcel) | $1.30M |
| Site work, grading, drainage & paved drive aisles | $1.15M |
| Covered canopy structures (350 spaces) | $1.55M |
| Enclosed drive-up buildings (70 spaces) | $0.95M |
| Open-lot improvements, fencing & perimeter security | $0.30M |
| Office/kiosk, utilities, dump & wash bay | $0.25M |
| Soft costs, design, permitting & contingency | $0.25M |
| Lease-up reserve & working capital | $0.15M |
| Total project cost | $5.90M |
| Item | Figure |
|---|---|
| Bank first mortgage (50%) | $2.95M |
| CDC/SBA 504 debenture (40%) | $2.36M |
| Borrower equity injection (10%) | $0.59M |
| Bank term / amortization | 25-year term / 25-year amortization |
| Illustrative bank rate | ~9.5% |
| Illustrative debenture rate | ~6.5% fixed, 25-year |
| Blended annual debt service | ≈ $501k |
Structure per SBA 504 conventions under SOP 50 10 8: a bank first mortgage, a CDC debenture in second position, and borrower equity; owner-occupancy 60% for new construction. See source 12.
The equity injection sits at the 10 percent SBA baseline, and it holds there precisely because the subject is a mixed-format facility rather than a single-use, climate-controlled box. Some lenders classify single-use climate product as special-purpose, which can escalate the required injection; a mixed covered, enclosed, and open-lot program is less likely to draw that designation, which is one reason the format decision is a financing decision, not only a marketing one.12 The two loans amortize over 25 years — the bank first at an illustrative 9.5 percent, the CDC/SBA debenture at a below-market fixed rate near 6.5 percent — for a blended annual debt service of about $501,000, the number the projected coverage has to clear. Because SBA 7(a) and 504 ground-up deals must reach break-even within 24 months of the certificate of occupancy, the absorption schedule is not just an underwriting input here but an eligibility gate, which is why the study grades the lease-up rather than assuming stabilization.12
Feasible and bankable, on coverage the credit can document.
The stabilized model builds effective gross income from the format mix, nets a storage-appropriate operating expense load, and carries the coverage through a graded lease-up to the lender's floor and beyond.
| Line | Basis | Amount |
|---|---|---|
| Covered canopy | 350 spaces × ~$185/space/mo5 | $777,000 |
| Enclosed drive-up | 70 spaces × ~$295/space/mo5 | $247,800 |
| Open uncovered lot | 80 spaces × ~$105/space/mo5 | $100,800 |
| Gross potential rent (500 spaces) | Blended ~$188/space/mo at 100% | $1,125,600 |
| Less economic vacancy & collection loss (8%) | Stabilized 92% economic occupancy6 | ($90,048) |
| Plus ancillary & other income | Admin, late fees, dump/wash, tenant protection | $30,000 |
| Effective gross income (EGI) | Collected rent plus ancillary | $1,065,552 |
| Operating expenses (~32% of EGI) | Management, security, insurance, property tax, R&M, G&A6 | ($341,000) |
| Net operating income (NOI) | EGI less operating expense | ≈ $724,552 |
Operating-expense ratio near 32% (NOI margin ~68%) is consistent with the 25–37% expense band typical of the niche; rates are format-specific achievable, not street asking. See sources 5 and 6. Figures are illustrative of the engagement type.
| Year | Stage | Economic occ. | NOI | DSCR |
|---|---|---|---|---|
| Year 1 | Lease-up (opening year) | ~65% | ~$452k | 0.90 |
| Year 2 | Building | ~78% | ~$575k | 1.15 |
| Year 3 | Stabilized | ~92% | ~$725k | 1.45 |
DSCR computed as NOI divided by the constant ~$501k fully amortizing 504 debt service (bank first plus CDC debenture). See source 12 for the coverage convention and the 24-month break-even gate.
The stabilized 1.45x coverage is the figure the lender documents, and it clears the roughly 1.20-to-1.25x storage underwriting floor with real headroom.6 By Year 2 the project already covers fully amortizing debt service at 1.15x. The Year 1 figure of 0.90x is intentionally below 1.0 — it is the lease-up year — which is why the project budget carries a lease-up reserve and working-capital line: the reserve and the sponsor's guaranty carry the opening year while occupancy climbs, and permanent coverage is measured once the yard fills. Crediting pandemic-era absorption, or day-one stabilization, is the most common way these storage pro formas fail review; the ramp here is deliberately graded against the 24-month break-even gate.6
On the equity side, the $0.59 million injection carries the lease-up drag: Year 1 operating cash flow runs modestly negative against fully amortizing 504 debt service, turns positive in Year 2, and reaches roughly $0.2 million of levered free cash flow once stabilized, net of a replacement reserve for canopy steel, paving, and access systems. A meaningful share of that coverage goes to principal rather than to distributions — the 504 debenture amortizes from day one — so the return builds as much through debt paydown as through cash yield. Valuing a Year-10 NOI held to modest growth on a conservative going-concern basis, and crediting no cap-rate compression against the exit, the blended, lease-up-dragged result is an illustrative levered equity IRR of about 16 percent over a 10-year hold.10
Verdict: financially feasible and bankable. On independently derived demand, a graded lease-up, a stabilized 1.45x DSCR, and a ~16% levered equity IRR, the projections support the SBA 504 credit.
Independent demand, format-fit, absorption, and DSCR stress.
The engagement was scoped the way a credit committee reads it. As an independent feasibility consultant, our role is to test the sponsor's projection against the market, not to restate it — the value of the deliverable is precisely that it carries no stake in the outcome. We sized demand from the installed fleet, the HOA-driven off-site push, and achieved occupancy at real competitors rather than a per-capita saturation ratio, then matched the format mix to what the trade area's incomes will actually pay for. Rates were modeled as format-specific achievable, net of move-in concessions, not street asking — economic occupancy can trail physical occupancy materially, and a pro forma on advertised rates overstates year-one revenue before a single vacancy assumption.
The coverage analysis was then stress-tested. We ran the DSCR against slower absorption and softer rates — the two variables a lease-up deal is most exposed to — and held operating expense realistic, because the low-opex thesis is real but not zero: property-tax reassessment to purchase price is the line most often understated. One scope boundary is worth stating plainly: as the feasibility consultant, we reference, but do not perform, the Phase I environmental site assessment and the appraisal, which are separate professionals' engagements running in parallel to the study. That combination — independent demand, format-fit, a graded absorption schedule, and a stressed DSCR — is what lets the lender rely on the file.
Underwriting a Texas RV and boat storage project for an SBA 504 loan? Start with the feasibility study.
Feasibility Study Company prepares independent RV and boat storage feasibility studies for SBA 504 and 7(a) credits, built to the coverage standard your lender and its CDC must document. A methodology briefing walks through the installed-fleet and HOA demand, the format the market will actually pay for, the absorption pace a credit committee will accept, and the DSCR analysis behind a case like this one, calibrated to your submarket and program.
Request a methodology briefingData sources and dates.
The deal figures are illustrative of the engagement type; the market data that grounds each dimension is real and sourced, drawn from our standing Texas, RV & Boat Storage, and SBA 7(a) & 504 analyses and the primary authorities they cite. RV and boat storage is rarely tracked separately from general self-storage, so several readings are provider-dependent and are noted as such.
- Yardi Matrix, Q2 2025 National RV & Boat Storage Report (data as of April 10, 2025): 1,937 completed dedicated stores within a 2,186-store database and 249-project pipeline, against roughly 52,000 traditional self-storage properties; same-store advertised rents ($5.99/SF, +1.1% YoY, March 2025); acres under construction ~4.4% of stock. Effectively the single dominant supply provider for the niche.
- StorageCafe (2025): national all-type average monthly storage rate (~$171) and metro RV and boat search-demand rankings, as compiled in the firm's RV and boat storage analysis.
- Toy Storage Nation / Modern Storage Media / Inside Self-Storage (2024–2025): supply-gap estimate (~5x current supply needed to meet latent demand); RVIA 2025 Go RVing Demographic Profile (IPSOS) and NMMA Recreational Boating Statistical Abstract (2024), converging on roughly 25 million US households owning an RV, a boat, or both; RV idle-time economics. Industry estimates, not audited.
- StorageCafe (2025) RV and boat storage search-demand rankings (Katy, TX 13.39 searches per 1,000 residents, highest nationally; Apache Junction, Myrtle Beach, Fort Myers following); catchment/drive-distance behavior (owners travel ~20–50 miles), as compiled in the firm's RV and boat storage analysis.
- Extra Space Storage and HomeGuide (2025–2026), with analytics.loan and MMCG (2025–2026): advertised and achievable rate ranges by format (open uncovered ~$75–150, covered canopy ~$125–250, enclosed drive-up ~$150–400, climate-controlled ~$300–500+), and regional Sun Belt readings (e.g., Dallas RV ~$248, boat ~$296 per space/month).
- analytics.loan and MMCG (2025–2026): operating-expense (25–37% of EGI) and NOI-margin (60%+) benchmarks, break-even and stabilized-occupancy ranges (stabilized routinely above 90%), and DSCR underwriting conventions (~1.20–1.25x floor; stress at ~85% occupancy). Proprietary, provider-dependent estimates.
- Foundation for Community Association Research (2023–2024): ~65% of new single-family homes (2023) HOA-governed; widely cited industry estimate that ~85% of HOAs restrict RV parking; municipal reinforcement (e.g., oversized-vehicle ordinances).
- Carraway RV & Boat Storage, Magnolia, Texas, public operating case study (2021–2024): 97% occupancy maintained while base rent grew from $4.69 to $5.35 per square foot.
- Yardi Matrix self-storage rate commentary (Jeffrey Adler, March 18, 2026): national self-storage street rates −1.1% in February 2026, 26 of the top 30 metros declining; localized RV and boat rate weakness in overbuilt suburban nodes, notably in parts of Texas and Florida; open-lot low barrier to entry.
- Cushman & Wakefield via easystoragesearch (2025) self-storage cap-rate series used as the closest proxy (~5.8–5.9% H1 2025); MMCG (2026) dedicated RV and boat cap-rate spread estimates (Class A ~6.0–7.5%, Class B ~7.5–8.5%). Exit valued on a conservative going-concern basis with no cap-rate compression credited. Single-provider estimates.
- U.S. Census Bureau, Vintage 2024 Population Estimates (Texas ~31.3 million residents as of July 1, 2024; exurban Texas cities among the fastest-growing nationally); Texas Comptroller of Public Accounts (Texas the 2nd-largest US economy, ~$2.9 trillion GDP; 90%+ of Texans in metropolitan counties; no state personal income tax); National Conference of State Legislatures (Texas has no general Certificate of Need law).
- U.S. Small Business Administration, SOP 50 10 8 (effective June 1, 2025): 504 structure (bank first mortgage, CDC debenture, borrower equity), owner-operated storage 7(a) and 504 eligibility, 10% equity injection (higher for special-purpose/single-use), owner-occupancy 60% for new construction, and break-even within 24 months of certificate of occupancy; combined 7(a)-plus-504 loan cap raised to $10 million effective July 4, 2026; Texas ranks #2 nationally in SBA 7(a) volume and is served by six district offices and statewide CDCs; Texas business personal property tax exemption raised to $125,000 per location effective January 1, 2026 (Proposition 9 / HB 9).