Friday, March 8th, 2019 March8th2019

Sell for News: The Airbnb of Self Storage

Published on March 8th, 2019

Sell for More News is a weekly blog series with interesting information from the world of commercial real estate.

 

I think stories like this are useful because they get you thinking outside the box.  Does the sharing economy really have a place in the self storage business?  Sharespace thinks so.

Keep in mind, in 2018 the self storage industry experienced high development activity across the country. Nationwide, units under construction and in the planning stages account for 9.7% of the total supply.  However, many markets are unfriendly to self storage developers.  Sharespace plans to provide an alternative storage option in those supply constrained markets.

Sharespace is a marketplace for unused space in homes and apartments (garages, extra rooms, storage closets).  Customers looking for storage are matched with neighbors who have an appropriate space to store their items.  Once a customer has moved their items into the neighbors’ space, the neighbor receives a payment each month, earning income from otherwise unused space. The Sharespace platform manages pricing, matching, schedule coordination, government ID collection and payment.

Sharespace wants to bring new storage supply onto the market in areas where it is expensive (or impossible) to build new storage warehouses. By adding supply near where consumers live, they want to give consumers access to lower cost, more convenient storage options.

Interestingly, Sharespace also argues its storage spaces are safer than traditional options:

  • First, unlike a traditional warehouse, Sharespaces are spread across many locations, so thieves cannot break into multiple units in a single night. This alone makes Sharespaces less attractive to thieves than a centralized warehouse where they can hit multiple units.
  • Second, they never publish or expose the locations of Sharespaces except to the customer who will be storing things there. This makes it harder to target Sharespaces than warehouses with published addresses and hours of operation.
  • Finally, unlike a warehouse that may be unstaffed for long periods of time and is in industrial parts of towns, Sharespaces are in people’s homes, in residential neighborhoods, with many more eyes watching for suspicious behavior.

In the same way that Uber and Airbnb have given travelers new options, Sharespace’s objective is to give customers a richer set of storage options to choose from.  They also hope to grow thousands of “home businesses” for their neighborhood hosts giving them an easy way to earn money from space that would otherwise go unused.

Sharespace thinks the right approach is to integrate multiple uses into the existing building stock, so those existing buildings better serve the community needs.  People will always be able to cheaply construct a storage warehouse outside of the population center, but then the things people are storing will be far away and less convenient.

Who knows…they may be onto something here.  Anytime you can make something as annoying as self storage more convenient AND more affordable you may have a real business.

 


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About Beau Beach, CCIM

Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.

Beau leads Prowess IRES which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.

He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.

Beau can be reached at 414.324.4938, 615.603.9770, click to schedule a call or Beau@ProwessIRES.com