315. Self Storage Could Be the Biggest Winner of Lower Interest Rates

Self Storage Income

AJ Osborne

Entrepreneurship, Education, Investing, Business, How To

4.9 • 591 Ratings

🗓️ 23 September 2025

⏱️ 26 minutes

🔗️ Recording | iTunes | RSS

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Summary

This is the biggest thing to happen to the self storage industry in years.

Last week, the Fed made their much-anticipated decision to cut rates. In the weeks leading up to the decision, interest rates fell sharply, reigniting the homebuying process for hundreds of thousands of Americans sitting on the sidelines. Rate cuts and mortgage rate declines will have momentous effects on the self storage market, and, I believe, will usher in a new cycle for self storage investing and wealth creation.

We, up until recently, have been going through a self storage recession. What most self storage investors don’t know is that some 40% of our customers come from moving alone. Raise interest rates, stop home purchases, and you cut off the lifeblood of the storage business. But now, that’s changing—and it’s changing in a major way.

In this episode, I’m going to explain why the Fed made their decision now (and whether they were too late), what lower interest rates mean for the self storage industry as a whole and your facility’s occupancy, and what I’m doing to prepare for this next cycle.

This is going to be HUGE.

What you’ll learn in today’s show:

Interest rate update and the Fed’s recent decision to (finally) cut rates
What happens to self storage when rates fall (even by a small margin)
How lower interest rates could bring back rent increases for storage facilities
My investing plan if rates continue to trend downward
Why the Fed changed their tone and what their new verbiage means

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📑 Our Self-Storage Feasibility Studies will help you speed up the process in understanding markets, potential risks, and analyzing the facility itself. https://cedar.cc/feasibility-studies/

Transcript

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0:00.0	This is the biggest thing to happen in self-storage.
0:03.0	I'm not kidding. This changes everything, and its impact is huge, and I don't think a lot of people understand how this really affects our industry and these assets.
0:16.0	It has started. The new cycle for storage and wealth creation within storage has begun and we're
0:26.0	going to break it down and I'm going to tell you what happened it's no, but it is largely misunderstood.
0:43.2	So, what occurred was the Fed.
0:47.1	Now, of course, lower interest rates helps everybody.
0:51.5	It helps all commercial real estate.
0:53.4	But storage is different. And high interest
0:58.2	rates over the last three years, they hurt. Oh, the pain. Like I like the pain everyone.
1:06.4	I know you know all of you that's already in storage that are here listening to me like you know group
1:11.9	therapy here we'll all pat each other on the back like it's okay it's been rough really rough
1:18.5	and it's been rough because the higher interest rates just don't affect the trading of assets or
1:24.2	what they're worth it's not just about refinancing and getting a higher rate that
1:29.2	we now have to pay for, and that means that our expenses go up. That's not it. You see, the lifeblood
1:36.8	of our business is created from demand from people that need space. Now, other businesses and other
1:43.9	asset classes, higher interest rates
1:46.4	affected that asset, affects the refinancing, it affects how much CAPEX you can put into it,
1:51.9	it affects the development cycle, and it can affect customers. But for us, 40 plus percent of our
1:59.9	customers are from moving.
2:03.8	We have hit the lowest point of housing transactions even lower than 2008.
2:11.5	That's why the last three years, we saw rates drop more than they did in 2008, and by a lot. This was a self-storage recession through
2:22.3	and through. And it's been painful, not for buying and growing. It's been painful for even operating.
	...

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