Self-Storage Feasibility Study Case: A Climate-Controlled Facility in Bardstown, Kentucky, with a USDA B&I Loan

Feasibility Study Company prepares feasibility studies for owners, developers and their lenders, and this page shows what one looks like for a self-storage project. The subject is a hypothetical new facility in Bardstown, the Nelson County seat, built in two parts: a climate-controlled building of 30,000 net rentable square feet and a drive-up wing of 24,000, on about 3 acres along the US 150 corridor. It is financed with a USDA Business and Industry guaranteed loan. If you are weighing a project like this one, you can request a methodology briefing before you commit to land.

The market evidence below is real and dated, drawn from public sources. The site, the sponsor and the numbers in the model are hypothetical, and every model input that no source supports is labelled an assumption. For the wider picture, see our pages on self-storage feasibility, Kentucky markets and the USDA Rural Development programs.

Residents and households. Nelson County is growing faster than Kentucky as a whole: its population is up from 46,732 in April 2020 to 49,036 in July 2025, while the state moved from 4,506,287 to 4,606,864 [1]. The five-year survey for 2020 to 2024 counts 19,150 households in 20,330 housing units, and a median age of 39.5 years against 39.1 for the state [2]. Storage demand follows households, and a county of this size with this many homes has room for the garage-overflow customer who rents the first unit. The register's tenure and age counts, set out in the second table below, show how many of those homes are owner-occupied and how many residents are 65 or older.

A settled population. The survey puts the share of residents who moved in the past year at 9.7% in Nelson County and 12.5% statewide [2]. Low mobility cuts both ways for a storage owner. It means fewer move-in rentals of the kind that fill a facility in a college town or a military market. It also means the tenants who do rent may stay long, because their belongings come from an estate, a downsizing or a project that will take a year, and not from a short assignment. The research found no tenure data for any Bardstown facility, so the model does not claim a stay length; it assumes only a normal ramp to the Year 3 occupancy shown in the inputs.

Income and housing cost. Median household income in the county is $69,562, against $63,726 for Kentucky, and the median owner-occupied home is valued at $238,000, against $205,600 [2]. Residents who own a house worth that much have things to store and the means to rent space for them. The same survey puts the mean commute at 26.6 minutes, against 24.0 for the state [2]. A longer commute is a small sign that many residents work outside the county, and it raises the value of a facility on the way home.

Employers and the bourbon economy. A 2022 profile counted 2,612 manufacturing jobs at 59 establishments and 2,610 retail jobs in the county [3]. It named American Fuji Seal, Tower International, Heaven Hill, Sazerac and Toyota Boshoku Kentucky as the major employers [3]. Heaven Hill's new distillery, announced at a groundbreaking on June 6, 2022, carried a $135 million investment, 38 full-time jobs and an average wage of $33.62 an hour including benefits [5]. Bardstown Bourbon Company announced a $28.7 million expansion that spring on the same footing, adding 29 jobs and 55,000 barrels of annual capacity [6]. These are industrial wages, and employees on them rent storage for boats, seasonal gear and second vehicles.

Visitors. Visit Bardstown, citing the Kentucky Department of Tourism, put the county's 2024 tourism impact at $90.9 million, of which $62.6 million was direct visitor spending, supporting 450 tourism jobs directly and 623 in all [4]. A trade publication counted 11 distilleries within 16 miles of the court square in April 2025, when the town was preparing for its second National Bourbon Week [7]. Visitors do not rent storage. The businesses that serve them do: event suppliers, bourbon retailers, restaurateurs and the vendors who work the festival weeks. The model gives that commercial layer no revenue of its own and leaves it as upside.

What the research did not tie to Bardstown. Elizabethtown and Fort Knox lie in the adjacent region, and the research recorded one local operator naming Fort Knox among the areas it serves. The research found no figure that links the installation to Bardstown storage demand, so the model gives it no weight. It found no radius or drive-time demographics either, which is why the tables use the county as the reporting geography. Defining a trade area by drive time from the actual site is the first task of a full study.

The register adds measures that the research files did not carry, for Nelson County and for the Louisville/Jefferson County metro area that contains it. The metro rows show the larger market that Bardstown households can reach, and the comparison a tenant makes when a drive toward the city is an option.

The hypothetical site is about 3 acres of commercial land on the US 150 corridor in Bardstown. US 150, locally Springfield Road, connects the town to KY 245, which runs on to the Bluegrass Parkway and, beyond it, to I-65 near Shepherdsville. The Kentucky Transportation Cabinet's District 4 project list shows corridor work on US 150 in Bardstown, and the construction schedule near the site belongs in the lender's file [13]. No particular tract is assumed, and the study uses no listing, parcel or owner.

Zoning. The model assumes a tract in the B-3 Regional Retail Business district. The Joint City-County Planning Commission's Section 6.13 lists mini-warehouses among the district's principal permitted uses, so a storage facility needs no conditional use permit there [8]. The same section limits buildings to 50 feet in height, requires a 50-foot front setback, side yards of 15 feet (25 feet beside residential land), a rear yard of 25 feet and 20% open space [8]. A site of about 3 acres with two single-story buildings clears those limits with room for drive aisles, but the civil engineer has to prove it on a real parcel. Revised joint zoning and subdivision regulations took effect on April 8, 2025, and the Fiscal Court passed revised county regulations that define the mini-warehouse on June 3, 2025 [9][10]. A lender should confirm that the district text above survived those revisions for the parcel in question.

Approvals. By-right use shortens the entitlement path to a land disturbance permit, a building and zoning compliance permit through county code enforcement and the planning commission, and review by the city's Development Review Board [11][12]. The research found no published approval timeline, no impact or connection fees and no local construction cost index, so those items are conditions and not numbers.

Utilities, flood and traffic. Water, sewer, electric and gas service to the hypothetical tract are unknown and become lender conditions: will-serve letters, tap and impact fees, and the electric load for heating, cooling and dehumidifying a climate-controlled building. A FEMA flood zone determination for the parcel is a condition too, as is a count of average daily traffic on US 150 at the site from the state's count stations. None was retrieved. Storage tenants drive past a facility more than they search for one, so a traffic count is more than a formality for a drive-up wing.

Property tax. The tax bill depends on whether the parcel lies inside the city and in the Bardstown City Schools district or in the county school district. The model takes the more expensive case. Bardstown City Schools set a real property rate of 79.10 cents per $100 and a personal property rate of 81.30 cents, approved on September 29, 2026 [14]. The city held its own rate at 16.10 cents for fiscal 2025-26 [15]. Nelson County Schools cut their real rate to 67.0 cents from 67.3 in August 2025 [16], and the county Fiscal Court set 12.0 cents in 2024, down from 12.7 [17]. The 2025 county rate was not found. The county's 2025 tax roll was certified on July 22, 2025 [18]. State and library rates were not found as dated figures, so the model carries a placeholder of 0.16% for both. The sum of the dated components is applied to cost, not to an assessed value, which the property valuation administrator will set.

Operating costs are $262,077 in Year 3, leaving net operating income of $218,129, a margin of 45.4%. That margin is lower than a larger, more established facility would show, because a single-manager site carries payroll, insurance and taxes that do not scale down with revenue. The research held no operating expense benchmark for storage, so every ratio below is a labelled assumption, and the operating statements of comparable facilities, which a lender can ask for, should replace them.

Payroll starts at $85,000 and grows 3.0% a year. It pays a manager and part-time cover for a site that is open to tenants around the clock through its gate and staffed only by day. The confirmed climate-controlled competitors advertise on-site or remote management [19][20], and the sponsor's plan decides which model applies. Utilities run at 5.5% of revenue because the climate-controlled building must be heated, cooled and dehumidified all year. Repairs, marketing, administration and a management fee run as shares of revenue.

Property tax applies the four rates in the inputs table (city, city schools, county, and a placeholder for state and library) to land plus improvements at cost, including the contingency, and grows 2.0% a year. The assessment will not equal cost, and the PVA's value is a lender condition. Insurance is a placeholder of $19,000 in Year 1, because the research found no insurance terms; a bound quote that includes wind cover must replace it. The USDA annual retention fee of 0.55% is shown, on a base the model sets at the outstanding guaranteed balance (the terms sheet does not print it), as a cost on the assumption that the lender passes it to the borrower [24]. The replacement reserve is a modest allowance per square foot for roofs, doors, paving and mechanical equipment.

The guarantee. For fiscal 2026 the Business and Industry program guarantees 85% of a loan under $5,000,000 and 80% of a loan from $5,000,000 to $25,000,000, with an initial fee of 3.0%, an annual retention fee of 0.55% and a 0.50% fee for a guarantee issued before construction is complete [24]. A reduced-fee category charges 1.0% and 0.50% but guarantees only 80% [24]. The 85% tier replaced 80% in a notice published on March 9, 2026, effective October 1, 2025, and USDA announced it on March 27 [24][28]. A loan of $1,922,626 is well inside the 85% tier.

Eligibility. USDA's December 2021 rule removed the old ineligibility of self-storage facilities, so a storage project is no longer excluded by type [33]. Kentucky's program page lists the purchase and development of land, buildings and infrastructure for commercial properties among eligible uses and requires hazard insurance on collateral [34]. The project site must be in a rural area, which the program defines as outside a city or town of more than 50,000 people, with the project site governing [29][28]. The research did not retrieve the eligibility map result for any Bardstown parcel, so a determination for the actual site is a lender condition.

Rate and term. The lender and the borrower negotiate the rate, fixed or variable, and the term runs to the useful life of the collateral, up to 40 years or the state-statute limit, whichever is less [26]. The model carries 7.75%, which is Prime of 7.00% on October 9, 2026 [35] plus 0.75 points, and amortizes over 25 years because roofs, paving and mechanical systems wear out well before 40 years.

What the terms sheet leaves open. The USDA terms in the research print no equity minimum and no coverage ratio for B&I, and no separate term for real estate. The study therefore tests two lender-style parameters and labels both as assumptions: 25.0% equity and a 1.25x coverage floor in Year 3. The regulation asks for projections through at least two years at stable operations [25], which is why Year 3, the first stabilized year, is the test year. The lender's credit evaluation must include a written evaluation of the feasibility study [27].

The feasibility study. A guaranteed loan of more than $1,000,000 to a new business requires a study prepared by an independent qualified consultant acceptable to USDA [25]. The restructured loan of $1,922,626 is over that line, and for a loan of $1,000,000 or less USDA may still require one if the analysis is insufficient [25]. This page shows the market and financial sections that such a study contains; USDA sets the scope case by case.

The program's own risks. The fiscal 2027 budget request proposes no Business and Industry program level [29]. In May 2026 USDA revoked the approved-lender status of ten lenders whose portfolios held about $620 million in delinquent loans, roughly 47% of Rural Development's delinquent loans, and said more than 750 lenders remained [30]. A trade-association study reported that Kentucky received $470 million in guaranteed volume across 74 loans from 2012 to 2022 [31], and a $9.95 million guaranteed loan for an 81-room hotel in Campbellsville was announced in October 2026 [32]. The research found no Nelson County closing from 2024 to 2026, and the city's industrial development board lists local banks without any recorded Business and Industry activity [12]. Finding a lender that is both approved and active is a task of the engagement, not a given.

As proposed, the sponsor puts in 20.0% ($859,742) and asks for a $3,438,967 guaranteed loan. The structure fails the 25.0% equity test and covers Year 3 debt service only 0.69x, against a 1.25x floor.

As restructured, equity rises to 54.8% ($2,330,972) and the loan falls to $1,922,626, with annual debt service of $174,266. Coverage reaches 1.25x in Year 3 and 1.63x in Year 5. The loan stays under $5,000,000, so the 85% guarantee applies, and it stays over $1,000,000, so the independent study is required [24][25].

The restructuring is not a verdict on Bardstown. It reflects the distance between a project cost of $79 per net rentable square foot and a set of placeholder rents. Three levers close that distance: a land and construction price below the placeholders, a rent survey that supports a higher climate-controlled rate, and a phased build that defers the climate wing until the drive-up wing is full. The first two can be verified before the land is bought; the third changes the structure and the study would model it.

If your project faces a question like this one, talk to us about a feasibility study. We would test your site, your rents and your cost against the same program rules and show the lender where the loan stops. Other worked cases use the same method on different assets and programs, such as the Indiana self-storage case under SBA rules and the Texas RV park case under USDA.

The matrix moves climate-controlled occupancy against climate-controlled rent, the two numbers the research could not measure. Coverage in Year 3 runs from 0.76x to 1.82x on the restructured loan. The top-left cell, where occupancy and rent both fall, shows what a rival with a lower price and a similar product would do to the restructured loan. The bottom-right cell, where both rise, shows what a secret-shopper survey could reveal if Bardstown's climate-controlled rents and fill rates are better than the placeholders. The distance between those corners is the value of the survey, and the cells along the top row sit below the floor even before any rent cut.