Self-storage financing
Permanent Senior Debt for Self-Storage Properties
Permanent Financing Options for Self Storage Properties. Long-term capital, when leveraged correctly, can improve an investor’s returns. Permanent financing...
Updated July 24, 2026
The program terms on this page were published in 2022 and are kept here for reference. Loan sizing, leverage, and pricing move with rates and lender appetite, so treat them as background rather than a current quote. For live terms on a specific self-storage deal, ask the desk for a quote.
Long-term capital, when leveraged correctly, can improve an investor’s returns. Permanent financing options for self storage properties benefit investors greatly, offering maximized amortizations, lower interest rates, and better cash flow overall. Many types of lenders are able to offer permanent financing options, but there are important differences in the details of each of these options worth considering before making a choice.
Life companies, for example, usually offer the most aggressive permanent financing, but they heavily favor Class A storage facilities in top markets. Life companies also offer lower leverage and shorter amortizations, although in most cases longer-term, fixed-rate loans are fully amortizing.
CMBS loans, on the other hand, have a minimum $2 million amount and offer the highest leverage, up to 75%, with up to 30-year amortizations. Even so, the spreads on conduit loans lead to higher interest rates than life company loans due to liquidity issues in secondary markets.
Bank loans are often considered to be the middle ground between the previous two self storage loan options. There is always healthy competition for bank financing, so with larger transactions of $25 million or more, lenders tend to become more aggressive with financing terms. Additionally, at that size, pension funds and large institutional lenders may become involved as well.
2022 Commercial Mortgage Terms for Permanent Financing
- Minimum Loan: $1 million
- Term: Up to 10 years
- Leverage: Up to 75% LTV
- Amortization: 20 to 30 Years
- Recourse: Nonrecourse options available
- Prepayment: Defeasance, step-down, or yield maintenance
Sources for permanent financing include:
- Life companies
- National and regional banks
- Institutional lenders
- Pensions funds
- Private debt funds
Advantages
- Lowest rates
- Longest terms
- Best leverage
- Longest amortizations
- Fixed rates
Disadvantages
- Call protection (expensive prepayment penalties)
- Limited ability to recapitalize (with sale or refinance)
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