Self-Storage Feasibility Study Case Study: A Big-Box Retail Conversion to Climate-Controlled Self-Storage at Fayette Pavilion in Fayetteville, Georgia, That Is Not Feasible as Proposed or as Resized on Verified Local Rents

A conversion of the 39,995 SF former Big Lots at 375 Pavilion Parkway in Fayetteville, Georgia, into a 41,950 NRSF climate-controlled facility with a partial mezzanine, financed with an SBA 7(a) loan, in a county with a median household income of $111,978 and no self-storage moratorium. At a total project cost of $6,044,950 the conversion covers its 7(a) debt service 0.35x at a stabilized economic occupancy of 80 percent in Year 4 and would need 164.5 percent occupancy to cover at 1.0x. Resized to a single-story, 30,100 NRSF conversion at a building basis of $10 per SF, it still covers only 0.57x in Year 4. The program becomes feasible only at rents about 70 percent above those verified on the operators' own websites. Not feasible as proposed and not feasible as resized on verified local rents.

Model study prepared by MMCG Invest | Michal Mohelsky, J.D., FMVA | October 2, 2026

MMCG concludes that the conversion of the former Big Lots at Fayette Pavilion into a climate-controlled self-storage facility is not feasible as proposed. At a total project cost of $6,044,950 and an SBA 7(a) loan of $5,138,200 at 85 percent of cost, the facility produces a Year 4 net operating income of $178,570 against annual debt service of $486,146. Coverage is 0.35x in Year 4 and 0.40x in Year 5, the yield on cost is 3.0 percent, and the facility would need an economic occupancy of 164.5 percent to cover its debt once. The cause is the arithmetic of rent against conversion cost, not the building. The operators' own websites show a 10 x 10 climate-controlled unit at $58 to $61 per month in-store and $32 to $36 on the web, or about $0.58 to $0.61 per SF per month, against a national average advertised street rate near $16 per SF per year, or about $1.34 per SF per month. A conversion that costs $144 per NRSF to deliver cannot be carried by rents of about $0.65 per NRSF.

The resized program does not rescue the project. A single-story conversion of the box with no mezzanine, existing rooftop units retained, and the building acquired at an allowance of $10 per SF, or $400,000, reduces the total project cost to $2,865,500, but the 30,100 NRSF facility produces a Year 4 net operating income of $128,409 and covers its 7(a) loan of $2,292,400 only 0.57x. The retrofit, equipment, soft cost and financial reserve, at $2.4 million before the building, exceed the $1.3 million of total project cost that the Year 4 income supports at 1.25x coverage and 80 percent leverage, so no building price, including a price of zero, makes the program feasible at verified rents. The resized program covers 1.25x only if achieved rents rise to about $1.10 per NRSF per month, 70 percent above the verified local rates and about 18 percent below the national average street rate. The determination is therefore not feasible as proposed, and any resized proposal would be conditioned on a phone-verified rate survey that establishes whether the posted rates, which read unusually low against national data, are representative.

This is an MMCG model study: a complete feasibility analysis performed on a real, vacant big-box building using public data, prepared to show lenders and sponsors how MMCG reaches and documents a determination of not feasible, and how a conversion study tests the building price and the retrofit against local rents. It is not a client engagement. MMCG has no relationship with the owner of Fayette Pavilion, the leasing brokers or the City, the building is marketed for lease and not for sale, and the analysis does not represent an offer, an appraisal or a recommendation. The acquisition of the box as a fee-simple carve-out, the building basis of $35 per SF in the as-proposed case and $10 per SF in the resized case, every construction cost, income and loan figure, and the SBA loan terms are MMCG assumptions. The building area is taken from the landlord's leasing map. The competitors' rates were read from the operators' own websites on October 2, 2026 where noted and are marked secondary where they were carried from listing sites. The zoning district and use table, the shopping center's recorded covenants, the parcel acreage and assessed value, the Phase III ownership, the competitors' rentable area, the supply per capita and the municipal pipeline were not confirmed at the study date and are disclosed limitations.

The Project as proposed would operate as a climate-controlled self-storage facility in the former Big Lots at 375 Pavilion Parkway, Fayetteville, Fayette County, Georgia, on the Phase III pad of Fayette Pavilion, a regional power center on the southside of the Atlanta metro. The physical program comprises the existing 39,995 SF single-story building converted to 100 percent climate-controlled storage with a new 14,000 SF mezzanine served by a 4,500 lb freight elevator, for 53,995 SF gross and 41,950 NRSF in 482 units: 70 units of 5 x 5, 150 of 5 x 10, 172 of 10 x 10, 50 of 10 x 15 and 40 of 10 x 20, with a drive-in loading bay, a street-facing lobby and office, a gated and camera-monitored entry and kiosk rental. The facility would operate seven days a week with staffed office hours and 24-hour access, with a staff of 1.5 full-time equivalents. The sponsor is a first-time storage owner forming a new entity that acquires the building and the allocated parking field as a fee-simple carve-out from the center and operates the facility itself. The Project is positioned at the top of the verified local range, at $60 per month for a 10 x 10 at opening, against $58 to $61 in-store at the three operators whose rates were verified, with annual increases of 3 percent.

Marketing & Sales Strategy. The facility would launch with a web-first rental platform and search-engine listings, priced at the operators' in-store level and not at their discounted web rates, with a first-month concession for the first twelve months. The center's own traffic is the strongest built-in channel: the broker markets the center at more than 8 million annual visits (a broker claim, not verified), and the lobby, the street frontage and the center's pylon signage would be the principal conversion tools. B2B outreach would target the center's tenants, the residential communities around the Pavilion and moving, real estate and contractor businesses that need small climate-controlled units.

Amenities

The building is the former Big Lots in Fayette Pavilion Phase III, 375 Pavilion Parkway, Fayetteville, GA 30214. The landlord's leasing map lists the unit at 39,995 SF. The Big Lots store appears on the August 6, 2024 Georgia closing list and on the September 2024 Chapter 11 closing list of 344 stores; the exact final operating day was not confirmed. The center is a power center that Nuveen Real Estate sold to 5Rivers CRE of Houston in February 2024, in a transaction brokered by CBRE; the sales price was not disclosed. CBRE's press release at the sale describes the center as 1,063,840 SF on approximately 106 acres, Connect CRE reported it 96 percent leased with 68 tenants, and CBRE's current leasing marketing cites 1,570,413 SF on 150 acres, which conflicts and reflects a different boundary. The box is listed by CBRE as anchor space for lease, with pricing on request; no asking price for a sale exists. Whether the Phase III parcel was part of the 2024 sale, who owns it and whether a fee-simple carve-out of the building and its parking field is available were not confirmed. The study carries the building and allocated land at $35 per SF, or $1,400,000, in the as-proposed case, and at $10 per SF, or $400,000, in the resized case. The only for-sale former Big Lots located is a 43,660 SF building on 5.84 acres at 102 Utica Street in Hamilton, New York, fully sprinklered, listed at $975,000, or about $22 per SF (Cushman & Wakefield and Pyramid Brokerage listing, July 2, 2026); it sits in a college village that does not meet the growth screen and is used only as a price benchmark.

The zoning district and the use table were not retrieved at the study date. The center is likely in a commercial or planned commercial district, and whether self-storage is permitted by right, by conditional use or not at all was not confirmed. Two operating storage facilities within about 2.5 miles of the center suggest that the use is permitted nearby. The recorded declaration or reciprocal easement agreement governing the center was not reviewed, and it is the greater risk: a power center anchor box typically carries use restrictions and co-tenancy covenants that prohibit non-retail uses, and the study treats a covenant waiver as a condition precedent. The precedent in other markets is mixed. In Greece, New York, the zoning board required a use variance in July 2026 to approve a Stor-It climate-controlled facility in a former Big Lots and Wegmans building, because self-storage was permitted only in industrial or certain flex districts and a recorded covenant barred another grocery. No self-storage moratorium applies in Fayetteville or Fayette County. The City of Atlanta adopted a 180-day citywide moratorium on July 6, 2026 under Ordinance 26-O-1396 and referred a permanent special use permit requirement to its zoning board, and Rockdale County approved a 120-day moratorium on January 28, 2025 that covered mini-storage warehouses; neither reaches Fayetteville. Utilities were not confirmed; the building is an existing, served structure. The property tax allowance is $25,000 in the Year 4 operating budget on an assessed value near the completed cost, an MMCG assumption because the Fayette County millage was not pulled.

A conversion is the acquisition of real property plus its renovation, and both are eligible uses of a 7(a) loan of up to $5 million. The portion used to acquire or improve real property may have a term of 25 years plus the period needed to complete construction (13 CFR 120.212). The sponsor's storage operation occupies the whole building, so the 51 percent owner-occupancy test for an existing building is met. A start-up or complete change of ownership requires an equity injection of 10 percent at minimum under the SOP 50 10 8.1 summaries MMCG reviewed, and the model carries 15 percent in the as-proposed case and 20 percent in the resized case, because lenders in this niche underwrite start-ups above the minimum. The coverage requirement for a loan that is not an acquisition is 1.15x on a historical and projected basis under SOP 50 10 8; whether 8.1 retains that wording for construction and conversion loans was not verified. A conversion is not the acquisition of a business and falls outside Appendix 15. The leading SBA self-storage lender has stated publicly that it requires a third-party feasibility study before it reviews a loan request, and certified development companies require an as-complete appraisal for substantial renovation. Interest is modeled at 8.25 percent (an assumed Prime of 6.75 percent plus 1.50 percent; Prime was not verified at the study date).

The trade area is the City of Fayetteville and Fayette County within a drive of about ten minutes from the center.

Source: U.S. Census Bureau, QuickFacts, Vintage 2024 and 2025 estimates and ACS 2020 to 2024.

Both incomes sit at or above the national median, and the city is growing faster than the county, which points to in-fill residential demand around the Pavilion corridor. Demographics are not the problem in this study. The persons per household, the renter share and the housing permit counts were not pulled at the study date and are disclosed limitations; the as-proposed case fails on rent and cost at any plausible demand figure.

Fayetteville is a southside suburb of a metro that the 2026 national supply reports name among the oversupplied storage markets, with Southwest Florida, Miami, Tampa, Austin and Sarasota. Trepp data reported by CRE Daily in July 2026 place the Atlanta metro's share of self-storage commercial mortgage-backed securities balances on servicer watchlists at 50.31 percent, the highest of the metros named. The national supply forecast calls for about 52.9 million NRSF of deliveries in 2026, 19 percent below 2025, and for advertised street rates down 1.9 percent year over year in August 2026. The national average supply is about 7.0 to 7.4 SF per capita depending on the data provider; the supply per capita for Fayetteville and Fayette County was not published in any source retrieved. With at least eight facilities serving a city of 20,465, the trade area should be measured at county scale, and the study does not conclude from the facility count alone that the market is saturated. It concludes from the rates that the operators already in the market are charging.

MMCG identified seven storage facilities within about three miles of the site. Rentable area, climate-controlled share and unit mix are not published by the operators and were not confirmed. The rates below are the 10 x 10 climate-controlled rates read from the operators' own pages on October 2, 2026 unless marked secondary.

Competitor Number 1 Extra Space Storage, Facility 4149 This climate-controlled and drive-up facility is located at 1868 Highway 85 N, Fayetteville, GA 30214 and is operated by Extra Space Storage. Its operator page lists a first-floor indoor climate-controlled 10 x 10 unit at $61 in-store and $32 on the web under a flash sale, and a drive-up 10 x 10 at $77 in-store and $41 on the web. The rates are primary-verified.

Competitor Number 2 Public Storage, Highway 54 East This facility is located at 1222 Highway 54 E, Fayetteville, GA 30214 and is operated by Public Storage. Its operator page advertises climate-controlled units at $23 for an upper-floor unit and $26 for a first-floor unit, online only, with a $1 first month and a $29 administrative fee; the unit size was not isolated on the retrieved page, so the rate is not used in the rate conclusion.

Competitor Number 3 Public Storage, Highway 85 South This facility is located at 923 Highway 85 S, Fayetteville, GA 30215 and is operated by Public Storage. Its operator page shows rent from $10 for the smallest unit; the 10 x 10 rate was not isolated.

Competitor Number 4 Midgard Self Storage, GA-314 This facility is located at 235 GA-314, Fayetteville, GA 30214, close to the center, and is operated by Midgard Self Storage. The operator's site advertises a web sale of up to 40 percent off plus a second month free. The 10 x 10 climate-controlled rate was not captured.

Competitor Number 5 Midgard Self Storage, Highway 85 North This facility is located at 1950 Highway 85 N, Fayetteville, GA 30214 and is operated by Midgard Self Storage. A listing site shows a 10 x 10 climate-controlled unit at $58 standard and $35 under a deal; the rate is secondary.

Competitor Number 6 CubeSmart, West Lanier Avenue This facility is located at 815 W Lanier Avenue, Fayetteville, GA 30214 and is operated by CubeSmart. A listing site shows a 10 x 10 climate-controlled unit at $48 standard and $36 under a deal; the rate is secondary.

Competitor Number 7 SecurCare, New Hope Road This facility is located at 112 New Hope Road, Fayetteville, GA 30214; its pages now redirect to Public Storage, which indicates a change of ownership. Rates were not captured.

A listing aggregator reports an average climate-controlled rate of $68.19 per month across 37 facilities in the Fayetteville area (secondary). No facility under construction or approved within three miles was identified; that search is a condition of any renewed request.

Three operators publish a 10 x 10 climate-controlled in-store rate of $48 to $61, and the web rates run 40 percent to 50 percent below them. The study concludes an opening rate of $60 for a 10 x 10 climate-controlled unit, at the top of the verified in-store range, with 3 percent annual increases. The rates for the other sizes were not published on the pages retrieved and are derived from the 10 x 10 anchor using the per-SF gradient observed in the Simpsonville and Boston surveys in MMCG's other model studies (MMCG assumption). The concluded blended rate is $0.64 per NRSF per month at opening, or about $7.70 per NRSF per year, against a national average advertised street rate of about $16 per SF per year. The gap between the verified local rates and the national average is large enough that MMCG flags the local figures for phone verification; the determination is stated on the rates that were verified and tested against the national rate in the sensitivity analysis.

Units: 482

Source: operator websites accessed October 2, 2026; MMCG.

A 482-unit climate-controlled facility entering a submarket with at least seven existing facilities, each running web discounts of 40 percent to 50 percent, does not lease quickly. Physical stabilization is underwritten at 24 to 36 months and revenue stabilization at 36 to 48 months, consistent with the largest storage operator's own disclosures for new facilities. The model carries average economic occupancy of 25 percent in Year 1, 52 percent in Year 2, 70 percent in Year 3, 80 percent in Year 4 and 84 percent in Year 5.

Location: 375 Pavilion Parkway, Fayetteville, GA 30214 Size in SF (Gross): 53,995

Source: Marshall & Swift CoreLogic, MMCG

Total project cost of $12,541 per unit and $144 per NRSF reflects an existing shell that still requires a mezzanine, a freight elevator, a storage-density sprinkler system, full conditioning of 53,995 SF and a new roof allowance. The retrofit, at $3,280,600 of hard cost and $714,350 of partitions and equipment, is $74 per SF of gross area, at the top of the $35 to $75 per SF range that builders publish for the retrofit alone, before the building basis and the financial cost.

Loan Assumptions, As Proposed

The model carries operating expenses at 40 percent of effective gross income at stabilization, above the 32 to 38 percent range of private single-site operators because a conditioned facility with revenue near $300,000 carries fixed payroll, utility and tax costs that revenue does not dilute, and it phases the budget from 78 percent of the stabilized level in Year 1 to 103 percent in Year 5. The Year 4 budget of $119,047 comprises payroll of $31,250, property tax of $25,000, utilities of $14,583, repairs and maintenance of $9,375, insurance of $7,292, marketing of $9,375, administrative and software costs of $7,292 and a 5 percent management fee of $14,881. An itemized budget for a facility of this size would run higher; the benchmark ratio is a floor, and it makes the as-proposed result better than a built-up budget would.

Stabilized net operating income of $178,570 in Year 4 is 3.0 percent of total project cost and $4.26 per NRSF. The facility does not cover its debt in any year, and the Year 1 to Year 3 operating deficits and debt service shortfalls total more than the $450,000 financial reserve by a wide margin.

The facility would need more than 164 percent economic occupancy to cover its debt once. The break-even is not reachable at any occupancy.

No single assumption in the market evidence rescues the as-proposed program. Rents at the national average street rate, about twice the verified local rates, produce only 1.01x. The determination does not depend on the local rates being right: the program is too expensive for any rate the operators in this market charge.

The box supports a smaller project. A single-story conversion of the existing 39,995 SF with no mezzanine, no elevator, the existing rooftop units retained with ductless units added, a fire sprinkler modification instead of a new system and a building price of $10 per SF yields 30,100 NRSF in 348 units: 50 units of 5 x 5, 110 of 5 x 10, 125 of 10 x 10, 35 of 10 x 15 and 28 of 10 x 20. It is the lowest-cost version of the project MMCG could construct from published builder ranges, and the building price of $10 per SF, 55 percent below the only for-sale former Big Lots located, is lower than the owner of a vacant box in a 96 percent leased power center has any reason to accept.

Units: 348

Location: 375 Pavilion Parkway, Fayetteville, GA 30214 Size in SF (Gross): 39,995

Source: Marshall & Swift CoreLogic, MMCG

Loan Assumptions, As Resized

The Year 4 operating budget of $85,606 comprises payroll of $22,472, property tax of $17,977, utilities of $10,487, repairs and maintenance of $6,741, insurance of $5,243, marketing of $6,741, administrative costs of $5,243 and a 5 percent management fee of $10,701.

The resized program covers 1.26x only if achieved rents are 70 percent above the verified local rates, and 1.63x at the national average street rate. At the verified rates it needs 115 percent occupancy to cover once. The single-factor cases cluster between 0.50x and 0.69x. The finding that matters to the lender is that the retrofit and its related costs, before any building price, exceed what the income supports: at 1.25x coverage and 80 percent leverage the Year 4 income supports a total project cost of about $1.3 million, and the lean retrofit, equipment, soft cost and financial reserve total $2.4 million.

The determination of not feasible stands on the evidence above and is not conditioned. A renewed request would be reconsidered only on the following conditions:

The following items could not be verified from a primary source at the study date and are disclosed: the zoning district and use table; the recorded declaration; the parcel acreage, assessed value and Phase III ownership; the exact Big Lots closing date; the competitors' rentable area, climate share and unit sizes; the rates at Competitors 2 through 7 from the operators' own pages; the supply per capita; the Fayette County millage and utilities; Prime at the study date; and the rates for units other than the 10 x 10.

This model study applies the methodology described on MMCG's self-storage feasibility study page and SBA self-storage feasibility study page. MMCG prepares self-storage feasibility studies for SBA, USDA and conventional lenders nationwide, with engagements from $4,900 and delivery in 9 to 16 business days, and not feasible is a regular outcome of the practice.