Self-Storage Loans Just Dropped to 6.02%. For the First Time in Two Years, Debt Costs Less Than What the Property Produces.

The number that matters

6.02%. That’s the low end of new self-storage loan rates as of Q4 2026.

Two years ago, borrowing costs sat above what most facilities yielded. Every deal had to clear a higher debt-service hurdle. Many didn’t.

Now the spread has flipped. SOFR dropped 110 basis points. Lenders are underwriting again. For the first time since 2024, the debt on a well-underwritten storage deal costs less than the property produces.

What changed

SOFR: 5.3% in January 2024 → 4.2% in November 2025. That’s the benchmark that matters for commercial real estate floating-rate debt.

DSCR minimum: 1.15x in 2021 → 1.25-1.35x now. Tighter, but manageable. The lenders who stayed in the space through the 2022-2024 cycle are writing deals again, and they’re underwriting for actual cash flow, not projected rents from a broker’s pro forma. That works in favor of the conservative buyer.

100% bonus depreciation is available in 2026. For an acquisition in the $1-3M range, that’s real first-year tax savings.

Who this helps

The buyer who’s been waiting on the sidelines.

The investor who found a deal in 2024 that penciled at a 5.5% rate but needed a 7% note to make the DSCR work — and walked. That same deal at 6.02% with the same T12 and the same stabilized NOI changes the math. It’s not a different deal. It’s a different rate environment.

The maturity wall we talk about — facilities coming due for sale as the 2013-2015 construction wave hits year 10-12 — creates supply on the buy side. Positive leverage lets a buyer meet that supply with capital that works. The two forces together: more facilities for sale + cheaper debt to buy them. That’s the acquisition window.

What hasn’t changed

Conservative underwriting is still your shield. A 6.02% rate on a bad deal is just cheap debt on a bad deal. The walk-away rule still holds: if the deal doesn’t work on its own merits, let it go.

DSCR at 1.25-1.35x means lenders want skin in the game. The days of 1.15x DSCR with 10% down are behind us. For a buyer with real equity and a real track record, that’s a filter that keeps the undercapitalized bids out of your way.

Run the numbers.Pull the rate sheet from a lender who does self-storage deals. Compare it to your last deal’s underwriting. If the spread between your rate and your NOI has widened, every deal you passed on in 2024 deserves a second look — assuming the T12 held up. Positive leverage doesn’t mean any deal works. It means the deals that worked before work better. Run the numbers. Then run them again.