Squeezed, Not Broken: What Operators Say About Higher Rates
Self storage owners have spent years operating under elevated interest rates. On September 16, the Federal Reserve added to that pressure, raising its benchmark rate a quarter point to 3.75% to 4%, its first increase since July 2023, and signaling another may come by year-end.¹˒²
An SSA survey of 120 industry members, fielded the following week, shows the impact is not evenly felt. The sharpest anxiety belongs to owners with loans coming due, who may have to refinance at higher rates. But debt is only part of the picture. For owner-operators, higher rates also ripple through the rest of the business: slower home sales, tighter customer budgets, heavier competitor discounting and pressure on property values. Even so, nearly two-thirds expect industry conditions a year from now to be the same or better. They see a squeeze to be managed, not a break in the business.
SSA Interest Rate Impact Survey, September 24 to October 7, 2026 · 120 respondents
The cost of borrowing, not access to loans
Respondents are far more worried about what debt costs than whether they can get it. Lenders are still lending, but fewer deals make financial sense. "Higher interest rates mean higher monthly payments and/or larger equity requirements," one respondent wrote. "Either way, it may make the project not pencil out." Higher borrowing costs reduce the price buyers can justify paying, while many sellers continue to price properties as if interest rates were lower. As a result, buyers and sellers struggle to align on value, causing transactions to stall.
A chain reaction at the front desk
Owner-operators' most common concern is rental rate growth, with occupancy close behind. Both were selected far less often by non-owners in the survey. Many tied rates to slower home sales and fewer moves. "No one is moving so no one is storing," as one put it. They also noted customers keeping units for shorter periods as budgets tighten and competitors "giving heavier discounts, thus driving down normal rates."
Refinancing is where the pain concentrates
Nearly everyone who named refinancing as a top concern expects a negative effect. Brokers interviewed by SSA note that many facilities built in 2021 and 2022 are reaching the window to sell or refinance just as conditions for both have worsened, and that maturity extensions cannot go on indefinitely.³ That dynamic could increase refinancing pressure and bring more facilities to market in the months ahead.
What operators can do
Asked how they would respond if rates rise again, respondents leaned toward discipline over retreat, with the most common responses being greater investment selectivity and a stronger focus on operational efficiency.
- Get ahead of your debt calendar. Model any refinancing due in the next 12 to 24 months at today's rates and talk to your lender early. Treat an extension as a bridge, not a plan.
- Know your competitive landscape. Reviewing competitor promotions alongside broader market trends can provide a more complete picture of local market conditions and help identify opportunities within your market.
- Market beyond movers. Higher housing costs have made it harder for many households to move. As a result, people are staying put longer and often turning to self storage when they outgrow their available space. Tailor marketing and promotions to common storage triggers such as family growth, renovations, and space constraints.
- Underwrite at today's rates. Make sure a deal works without a rate cut and maintain conservative leverage.³
- Know your market. National sentiment can mask regional differences. SSA's studies on the Data Portal can be filtered by geography and provide a useful starting point for understanding your market.
The SSA Interest Rate Impact Survey collected 120 responses from September 24 to October 7, 2026, including 75 owner-operators. Quotes are lightly edited for spelling.
Sources
- Minutes of the Federal Open Market Committee, September 15–16, 2026, Federal Reserve
- "Fed's Interest Rate Decision: September 16, 2026," Advisor Perspectives
- Laura Williams-Tracy, "Storage Mortgage Brokers React to Fed Raising Interest Rate," SSA, September 18, 2026