Steel storage racks, widely used in industrial and commercial warehouses, are lightweight yet heavily loaded structures composed of thin-walled cold-formed steel elements. Their seismic vulnerability stems from the use of proprietary semi-rigid connections, asymmetric bracing configurations, and limited ductility of critical components. This paper presents a comprehensive assessment of the seismic and progressive collapse performance of a braced pallet racking system through experimental testing and analytical evaluation. The study is part of the PC-RACKS 2 research project, funded by the European Union – Next Generation EU. A real-world steel storage rack was chosen as a case study. The behavior of the main connections was characterized using finite element (FEM) models calibrated against full-scale experimental tests. The axial load–moment interaction in the thin-walled members was defined by accounting for local instability effects and the influence of perforations. Both nonlinear static and dynamic analyses were performed. The findings reveal that insufficient connection detailing can lead to brittle failures, primarily due to shear and bending in the bracing joints. Furthermore, in progressive collapse scenarios involving column removal, increased axial forces in adjacent columns can trigger brittle failure mechanisms. This work highlights the necessity of performance-based design for storage racks, with an emphasis on robust bracing systems, accurate connection detailing, and torsional stability. The results provide a valuable framework for enhancing the safety and resilience of storage structures, especially in regions prone to seismic activity.