- The Airbnb of self-storage, Neighbor, has seen a surge in demand as a result of the pandemic, according to CEO and cofounder Joseph Woodbury.
- The company announced a partnership Tuesday with landlord and operator Bridgeton Holdings to fill vacant office space with self-storage in San Francisco and eventually across the country.
- This comes as the coronavirus forecasts an uncertain future for the office market.
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The coronavirus has accelerated the trend of using under-utilized real estate for other purposes, like turning retail storefronts and parking lots into distribution hubs for e-commerce fulfillment and redeveloping malls into communities by adding residential units.
One area of commercial real estate that’s in high demand is self-storage. The average spend on construction of new facilities per year jumped to $5 billion in 2018 from $1 billion in 2015. With the coronavirus prompting moves, a likely trigger for self-storage needs, it’s possible that high amounts of spend on construction may not be enough to meet the supply.
That’s the thesis behind Neighbor, a company founded in 2017 to match people looking to store their stuff with people who have extra space in their home, garage, or shed. The person with the extra space receives rent for the space, while the person looking to store things pays roughly half of the going rate for self-storage in their area. The concept turns the gig-economy into something closer to the passive investment of owning real estate, requiring even less attention than an Airbnb property.
“This is the first marketplace where you can list a garage, have someone store their boat in your garage,. You don’t see them for a year, but all that time, you get passive income for basically doing no work,” Neighbor CEO and cofounder Joseph Woodbury told Business Insider.
While the company remains committed to the marketplace, the company announced today that it is partnering with New York-based landlord and developer Bridgeton Holdings to bring self-storage to vacant office space. While the partnership is originally focused on the San Francisco area, the plan is to expand to properties across the country in Bridgeton’s portfolio, according to Woodbury. Bridgeton, which owns 40 properties across five states according to its website, has launched a new operating company for the project – Stuuf.
Woodbury told Business Insider that the company plans to continue signing deals with commercial real estate owners of all types. With coronavirus potentially reshuffling the deck for office operators, and almost certainly continuing to accelerate the retail apocalypse, there may be a lot more space available for the company in densely populated areas, ideal for self-storage.
Woodbury said that this isn’t the company’s first partnership.
“We’ve partnered with one of the largest airport parking companies in the nation,” Woodbury said. “The sky is the limit on commercial-style space that can be onboarded to the platform.”
Neighbor needs that extra space, as the company has seen demand surge, according to Woodbury, as people move out of homes or do spring-cleaning during the pandemic.
The company is also launching in the San Francisco market. While Neighbor is available across the country, the company has officially hubs in cities where it focuses its marketing and business development spend.
Neighbor raised a $10 million Series A funding round led by Silicon Valley-heavyweights Andreesen Horowitz, Pelion Ventures, Album Ventures, and others, including Uber’s first CEO, Ryan Graves.
Airbnb, the most famous provider of a peer to peer marketplace for real estate, has also partnered with larger commercial real estate companies, though it has run into some road bumps recently. Airbnb planned to open a new concept with RXR Realty at Rockefeller center, combining office space with short-term rentals, until it was canceled as a result of the pandemic. The company has also partnered with Natiivo to develop condos that are designed to be easily-rentable on the home-sharing website, but a legal dispute has halted the partnership.