Storage Unit Commercial Loans 2026 | Terrydale Capital Guide
Terrydale Capital
Jan 7, 2026 9 Min read
The Market Has Changed. So Should Your Expectations.
Financing a storage unit complex—whether you're buying one or building new—means stepping into the commercial real estate market. That market looks different now.
Rates are higher than they were before the pandemic. But they’ve stopped rising as quickly as they did from 2022 to 2024. That’s good news, but not a green light to expect cheap money.
What borrowers need now is clarity. Not hype. This guide gives you that.
We’ll walk through:
Where commercial loan rates stand in 2026
How lenders actually price deals
Typical terms for self-storage loans
Current cap rates in the sector
What experienced borrowers should prepare for
How Terrydale Capital approaches financing in this space
This is based on public benchmarks and market activity from early 2026. No fluff. Just facts.
Commercial Loan Rates Aren’t a Fixed Number
When people ask “what’s the commercial loan rate right now,” they usually expect a simple answer.
But that number doesn’t exist.
Commercial loans are priced as an index plus a spread. Most lenders use one of these:
10-year U.S. Treasury yield
SOFR (Secured Overnight Financing Rate)
Prime rate
They then add a spread based on risk.
As of January 2026, here’s what we’re seeing:
Most commercial mortgage rates start in the mid-5% range
The best deals—typically for low-risk borrowers—land 1.85% to 2.85% over the 10-year Treasury
Fixed-rate loans are expensive, so many deals use short-term adjustable rates
These rates aren’t set in stone. Where you fall depends on the deal itself—your credit, your experience, and the property.
Why Self-Storage Stands Out
Self-storage has a different story than office or retail. That’s why lenders treat it differently.
Why?
People need storage whether or not the economy is booming.
Businesses do too.
It’s a steady, low-touch business with fewer moving parts.
Cap rates in self-storage have gone up lately, sitting around 5.5% to 7.5% depending on location and asset quality.
Higher cap rates affect what you can borrow. They don’t directly set loan rates, but they do shape how lenders think about risk and return.
How Lenders Price Storage Unit Loans
Let’s break it down.
1. Borrower Profile
Your experience and financials matter. Lenders look at:
How long you’ve owned or operated commercial properties
Your credit score
Net worth and liquidity
Your debt service coverage ratio (DSCR)
The stronger your profile, the tighter your pricing.
2. Loan-to-Value (LTV)
Most lenders today cap leverage at 65% to 75% LTV. SBA loans can go higher but come with strings attached.
Non-bank lenders may stretch this if your cash flow is strong.
3. Debt Service Coverage Ratio (DSCR)
Lenders want your net income to comfortably cover the loan payments.
For storage, 1.25x to 1.35x DSCR is typical. Some lenders allow lower if you’ve got deep reserves or strong guarantees.
4. Loan Term and Amortization
Most loans are structured like this:
5 to 10-year terms
25 to 30-year amortization
Shorter terms give you the option to refinance if rates drop.
5. Index + Spread
That’s your real rate.
Here’s the formula:
Rate = Index + Spread
Your spread is based on:
Property type
Borrower risk
Loan term
Current market conditions
In early 2026, the 10-year Treasury is still elevated. That affects all commercial pricing.
Common Loan Structures for Storage Units
Here’s how it usually breaks down.
Traditional Bank or Agency Loans
Best for stabilized assets and strong borrowers.
Priced off the 10-year Treasury
Spreads in the 180 to 300 bps range
Long-term fixed and hybrid options
Bridge Loans
Good for value-add or turnaround plays.
Higher rates, shorter terms (1 to 3 years)
Flexibility to stabilize before refinancing
Useful if you’re not quite ready for permanent debt
SBA Loans
If you’re owner-occupying or redeveloping.
Lower fixed rates
Backed by the government
Paperwork and eligibility can be a hurdle
Private and Mezz Debt
When traditional lenders pass or you need fast capital.
High spreads
Less red tape
Can fill capital gaps, but not cheap
What Borrowers Should Expect in 2026
Let’s talk reality.
Interest Rates Are Still High
Gone are the days of 3% commercial loans. Most deals now close in the 5.5%+ range. That’s just the cost of capital today.
Structure Beats Rate
A good loan isn’t just about the rate.
Flexibility, amortization, and prepayment terms matter. A slightly higher rate with good structure often wins over a low teaser rate that resets soon.
Cap Rates Are Up Too
Storage cap rates are now in the 5.3% to 7.6% range. That means your income won’t stretch as far as it did in 2019.
Lenders notice that too. They price accordingly.
How to Prepare for a Storage Unit Loan
Want the best shot at financing? Here’s your checklist:
Clean financials (2–3 years of history, clean books)
Solid credit profile
Realistic underwriting—don’t assume rates will drop
Loan structure that fits your plan
A good broker to help you shop and negotiate
How Terrydale Capital Works
We don’t pretend to predict rates.
We work with what’s real.
That means:
Analyzing your deal and its cash flow
Matching you with the right lenders
Structuring loans that work for today’s market
Helping you plan your exit or refinance strategy
We don’t chase shiny numbers. We help you close real loans.
What You Should Do Next
Don’t wait for the “perfect” rate. That’s not the world we live in anymore.
Here’s what you can do now:
Get quotes from real lenders
Stress-test your deal at current rates and a few points higher
Match your loan structure to your actual plan
Look at total loan cost, not just the interest rate
Partner With Terrydale Capital for Your Debt Financing Needs
When it comes to debt financing, understanding the right timing, process, and options is crucial. At Terrydale Capital, we provide a comprehensive range of commercial loan solutions tailored to meet your business's unique needs.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
