Meet Neighbor…The Airbnb of Self-Storage
Got extra stuff? Got extra space? A new company is ready to make a match. Neighbor, based in Salt Lake City, connects homeowners online with people who need storage space. Its CEO says the barely 2-year-old company is already seeing 500% annual growth.
“Currently there are more storage facilities in the U.S. than there are Starbucks, McDonald’s, WalMarts, Home Depots, Dominos pizzas, Dunkin’ Donuts and Costco’s combined. So it’s just this massive industry that we are trying to disrupt,” said Joseph Woodbury, co-founder and CEO of Neighbor.
The premise is pretty simple, much like Airbnb, just with stuff instead of people. Homeowners can advertise space and set their own prices, although the website offers guidelines. Listings are now in 48 states and the District of Columbia, and it is also going international.
“It’s not just garages and basements and driveways,” said Woodbury. “We’ll have people put up barns, their old barn, and they’ll store classic cars in their barn. We have people put up even small spaces in university towns. People put up a closet, and students will come store two or three boxes in their closet.”
Homeowners are allowed to inspect anything they store, and Neighbor insures them for up to $2 million in case their home is damaged or someone is hurt on their property while moving their stuff in. Homeowners also have the right to reject anything.
Renters also get some insurance on their goods and the added convenience and safety of a family home.
“One in 5 storage facilities gets broken into every year, so when you’re storing your items in a residential area, they’re already safer,” said Woodbury.
It is also a lot cheaper for renters than the big public companies because homeowners have less overhead. Large companies charge about $50 per month for a five-foot-by-five-foot storage space; listings on Neighbor.com can be half that for more space. Neighbor gives homeowners guidelines, but in the end it’s up to them to set the price.
There are currently six self-storage REITs in the $38 billion sector, including Public Storage, Extra Space Storage and CubeSmart. Growth in these stocks overall is a strong 21% year to date, according to NAREIT.
If Neighbor’s storage business really takes off, it could take a bite out of these companies, just as home sharing and ride sharing disrupted their sectors. So far, it appears there is plenty of space in the space.
Article by Diana Olick, CNBC.com August 20, 2019