Self-storage buyers who fail to provide a complete loan package could wind up with a dearth of bids from lenders. This article outlines the steps to assemble a strong loan request and the information it should contain.

Jay Crotty

January 9, 2018

4 Min Read
How to Assemble a Strong Self-Storage Loan Package to Secure Your Deal

When investing in a self-storage facility, the next step after finding the right property is to secure financing. To do this, you need a detailed loan request that allows lenders and brokers to clearly understand your objectives and determine the best funding avenue for your needs.

It’s important to present a thorough and accurate package to prospective lenders because all details will be fact-checked. Failure to do so could result in a dearth of bids from lenders. The following steps will help you assemble a strong loan package, outlining the information it should contain.

Understand the ‘Ask’

To begin, you must understand the “ask” you are creating. Different types of financing will require different asks. For example, a construction financing would need a different loan structure than a refinancing because these two situations have different long-term goals. To ensure your loan meets your needs and the ask will be successful, think critically about your investment strategy in the near and long term.

Different loan structures have different criteria, such as interest rate, amortization, loan amount and terms, all of which should be made clear in the ask. It’s important to present the correct ask for the right type of lender.

Identify Lenders

Once you’ve perfected the ask and loan structure, your next step is to identify lenders. It’s important to find those who understand the self-storage asset class. Ideally, you want several options. While it may appear that banks with which you have an existing relationship are offering the best quotes, you want to ensure you’re getting the best terms. The only way to do that is to create a bidding process. Having options will keep you in control and result in the most promising outcome.

Remember that lenders will try to negotiate and offer different terms from what you originally asked. Having a trusted adviser to work with you through the bidding process will ensure you not only ask for the right things, but that you’ll get the structure and terms you want.

Package Your Loan

After you’ve selected a lender, create a detailed loan package that outlines the deal. There are a few steps to this, and all of them are important to the process. Here’s what you need to include, in order of appearance:

  • Loan summary: This is an abstract of the proposed deal. It introduces the transaction and its appeal, without overloading information.

  • Property summary: This provides more details about the property and its physical qualities.

  • Operating history: This is an important outline that will be closely examined by lenders. It should include details on the property’s financials and operation. When presenting the information, highlight any one-time expenses, as they can be excluded from the lender’s analysis.

  • Location overview and demographics: This section highlights the property’s location and the demographics of the area. It’s good to note things like large business headquarters, multi-family housing developments, new housing construction, colleges and military bases.

  • Market analysis: This detailed section should compare the subject property to surrounding self-storage facilities. You’ll want to include a rent-comparison analysis to illustrate how unit rates compare and a rundown on how physical occupancy stacks up across the competition. You should also have an idea of any new construction projects on tap for the area.

  • Borrower biography: This will be about you and any business partners. Include a biography that lists any qualifications that confirm your experience. Lenders will research anyone who has at least 20 percent ownership in the company.

  • Property management: Lastly, this section details your management experience and the qualifications of the onsite staff. You should discuss how you’ll compete in the market and provide any success stories that illustrate customer satisfaction.

Seek Professional Advice

Now that you know what it takes to create a loan package, you’re ready to begin the process. While it’s possible to follow these steps to create your own request, consider working with a professional adviser who has your best interests in mind.

Experienced professionals in the debt and equity space have relationships with different lenders and can help you perfect your ask. They’ll also ensure you have several lenders bidding through the process, as opposed to a single bid from a bank. This will help you obtain the best terms for the deal. Look to work with an adviser who is knowledgeable about the self-storage industry and has experience in these types of loans.

Jay J. Crotty is a managing partner with SkyView Advisors (formerly BayView Advisors), a national investment sales and advisory firm focused exclusively on the self-storage market. Jay provides a range of advisory services including acquisition, disposition and recapitalization strategies, asset valuation, joint-venture structures, and debt and equity finance strategies. The SkyView team has completed more than $1 billion in transactions throughout their careers. For more information, call 813.579.6363; visit

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