Self Storage Loans
Self Storage Loan Rates - Rates updated July 26th, 2024
| Loan Product | Rates (start as low as) | LTV | |
|---|---|---|---|
| 5 Year Fixed Rates | 6.33% | Up to 75% | Get Free Quote |
| 7 Year Fixed Rates | 6.36% | Up to 75% | Get Free Quote |
| 10 Year Fixed Rates | 6.43% | Up to 75% | Get Free Quote |
We are pleased to offer self-storage loans for the purchase or refinance of self storage properties nationwide. Select Commercial specializes in self-storage and mini-storage financing. Self storage is an industry where rooms, lockers, containers, and/or units are rented on a short term basis to individuals and businesses, usually on a month-month basis. Most self storage customers use self storage facilities when faced with a death in the family, a divorce, a relocation, or when faced with downsizing. These units provide temporary storage until the renter is able to move the items to a more permanent location. Self storage locations often contain three types of storage: regular inside units, climate controlled units (heated and air-conditioned), and outdoor storage for boats and vehicles. Units are locked, allowing the renter privacy and protection from theft. Units are most often windowless, constructed of corrugated metal, and contain roll-up doors for easy access. Many of these properties are contain security guards and/or security cameras for customer safety. Many self storage owners like these properties because management is relatively easy and expenses can be kept to a bare minimum, as most self storage properties don’t require lots of utilities or management. Self storage properties can be found these days in almost all urban, suburban, and rural locations. Let us help you start, purchase, refinance or grow your self storage business! Our minimum loan size is $1,500,000.
We are a nationwide commercial mortgage broker specializing in all types of commercial mortgage loans, apartment loans, multifamily loans, and credit tenant lease loans.
Our Commercial Real Estate Loan Benefits
Self Storage Loan rates start as low as 6.43% (as of July 26th, 2024)
• A commercial mortgage broker with over 30 years of lending experience
• No upfront application or processing fees
• Simplified application process
• Up to 75% LTV (90% with SBA)
• Terms and amortizations up to 30 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
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Self Storage Loan Outlook for 2024
Following a stretch of historically low vacancy resulting from pandemic lockdowns, self-storage fundamentals were defined by a period of normalization in 2022 and 2023. The national vacancy rate entered 2024 at 9.6 percent, near pre-COVID-19 levels, despite an inventory increase of 13.6 percent, nearly 242 million square feet, during the preceding four years. Despite expectations of increasing household formation this year, the tight housing market could restrain storage space needs, placing upward pressure on vacancy rates in most major metros. The average 30-year fixed-rate residential mortgage was near 7 percent in early 2024, discouraging owners with lower rates from selling and reducing household mobility, a major source of storage demand. On a positive note, loosening monetary policy expected later in the year could stoke the housing market and relieve some of the restraints on home sales, in turn reviving storage space demand.
Sector consolidation drives change in street rate dynamics. Since late 2022, the storage industry has been impacted by falling asking rents. While this sparked concerns of oversupply, particularly in markets with active development pipelines, evolving pricing models have played a more significant role. Private owner-operators traditionally dominated the storage business, but as the sector has matured, major firms have acquired nearly 60 percent of net rentable square footage in the U.S., with an outsized presence in major metropolitan areas. As larger operators have increased their market presence, they have started to apply dynamic pricing with low teaser rates to draw in new tenants, followed by subsequent rate increases to ultimately achieve a higher target monthly rent. This has reduced visibility into actual effective rents while putting downward pressure on asking rates. In many cases, this has put some of the smaller private operators at a competitive disadvantage because they may lack the market data and automated systems to replicate the dynamic pricing models.
2024 National Self-Storage Loan Outlook
Supply additions taper across most major metros. Elevated construction loan rates and materials costs have weighed on development, with deliveries tapering this year. Investors should, however, remain cautious about the pipeline of facilities that could come online in 2025 and 2026 as the flow of construction capital into self-storage has been on the rise in recent months.
Local legislation continues to sporadically impact development. Entering 2024, certain municipalities have adopted moratoriums or similar restrictions aimed at limiting the development of self-storage properties. These initiatives are usually limited to specific areas within wider metros.
REITs largely focus on major metropolitan areas. Although large self-storage REITs are a substantial force in urban and suburban locales, they have yet to branch out to rural areas where their scale, infrastructure, and management capabilities deliver a less substantial advantage. As the sector consolidates, the largest operators may seek growth opportunities in smaller markets.