When Jeff and Sandy Hunter, owners of the Vault Self Storage Facility in Surprise, Arizona, became interested in refinancing their existing construction loan in order to take advantage of favorable rates, we looked to see if we could add them to our list of borrowers.
The Hunters knew that securing a construction loan for a facility that has only been in operation for two years can be difficult. And, although CapitalSource Small Business Lending recognized it as a potential red flag, our dedication to thorough due diligence and a full understanding our customer’s storage business helped propel the loan.
Commercial appraisal data provided by the Hunters showed a healthy local market for Vault Self Storage. Monthly occupancy rates and revenue were trending upward. And, the steps the Hunters had taken to make their original 100,000-square-foot facility green—integrating solar panels on the roof and implementing water conservation initiatives among them—were paying off. Energy efficiency was on the rise, a green-storage-facility designation had been earned, and Mini Storage Messenger magazine named them the 2011 Green Facility of the Year, resulting in greater visibility within the community they serve.
Combined, these positives allowed us to project a stabilization time period for this property which supported an appraised value sufficient to make a loan. We secured a 25-year, fully amortizing loan via the SBA 7(a) program for Vault Self Storage; they are now enjoying stable and consistent monthly payments that help preserve cash flow.