Neighbor Inc., a national peer-to-peer self-storage marketplace, has closed a $10 million Series A funding round led by Silicon Valley venture-capital firm Andreessen Horowitz. Neighbor intends to use the money to strengthen its presence in core markets like Los Angeles and Salt Lake City as well as fund further expansion across the United States, according to a source.

“The self-storage industry in the United States will eclipse $40 billion in revenue in 2020, capping off a decade of astronomical growth that we believe is firmly related to the burdensome costs of homeownership and the increasing premium placed on space,” Neighbor CEO Joseph Woodbury said in a press release.

As part of the funding, Jeff Jordan, managing partner at Andreessen Horowitz, will join the Neighbor Board of Directors. Jordan also sits on the boards of Airbnb, Instacart, Lime and Pinterest. He was formerly an executive at eBay, PayPal and OpenTable. “Neighbor has a lot of the attributes that first attracted me to the Airbnb investment—economic empowerment for the hosts, a superior value proposition for the guests in a huge market, and better leveraging existing infrastructure in a sustainable way,” Jordan said. “I look forward to supporting their efforts to build a comparable company.”

Other investors who contributed to the round include Nate Bosshard, a former partner at Khosla Ventures and co-founder of Tonal, and Ryan Graves, who served as the first CEO of Uber, the release stated.

Neighbor received $2.5 million in seed funding in 2018. The latest round comes at a time in which other self-storage peer-to-peer platforms have had trouble gaining traction, a source reported. “Most marketplaces fail,” Woodbury said. “It has to be at a certain scale.”

Launched in Salt Lake City in 2017, Neighbor has a presence in all 50 states. The online platform matches people in need of storage with local hosts willing to rent available space. Some Neighbor hosts have made $25,000 in annual, passive income, according to the release.

“A lot of our growth continues to be organic,” Woodbury told a source. “The more people we get making thousands of dollars, the more people we have telling their friends about it.”

Based in Lehi, Utah, Neighbor primarily offers peer-to-peer storage in Utah, though it’s platform invites hosts to connect with storage seekers anywhere in the nation, according to its website.

Sources:
PR Newswire, Neighbor.com Taps Andreessen Horowitz to Lead $10 Million Series A Funding
Yahoo Finance, Airbnb-Inspired Startup Neighbor Raises $10M to Crack Self-Storage Puzzle
Deseret News, Storage Disruptor Neighbor Snags $10M From Silicon Valley Heavyweights
Neighbor, Website

I founded Pack, Stack & Store Inc. in January 2015 with my business partner, Brian Harrington. Our plan was to create a better storage experience by leaning on our combined strengths in general contracting and facility operation.

We selected Huntley, Ill., for our first project due to the recent population surge in the market and lack of competitors in the area. We decided to go with a simple, proven design for the ground-up development: a single-story, fortress-style masonry building with a tower above the retail area and a strong focus on technology, convenience and security. It was based on Brian’s previous ownership of another storage operation as well as customer and manager feedback.

Top Features

Once construction started, we began the work of choosing the most important technology features to integrate into the construction and operations setup. Some we looked at were so new they’d never been used at any other storage site. For example, some of the surveillance technology hadn’t been available in self-storage previously but was being previewed at industry tradeshows.

The challenge was to prepare and set up these unknown systems before the grand opening of our facility in July 2019. After careful research and planning, we decided to incorporate the following into our design:

• A smart surveillance system
• Motion-activated camera recording with large-screen monitors displaying activity in the office
• Artificial-intelligence security software originally designed for security-guard services to detect people, vehicles and potential threats
• A special license-plate camera that automatically reads and stores short video clips of each vehicle that enters the property
• Remote offsite monitoring with threat-detection alerts sent 24/7 to connected mobile devices
• Adjustable security settings for creating restricted areas and time zones as well as monitoring the loitering of people and vehicles
• 12 TBs of hard-drive storage on the digital video recorder for longer access to video playback
• Cylinder-lock-only latches for extra theft protection
• Online payments, reservations and rentals via an optimized, user-friendly website integrated to the management software and access-control system
• A mobile app that allows staff to take payments and process move-ins, transfers and retail sales from anywhere
• Smart climate-control monitoring
• WiFi thermostats that are centrally monitored and adjusted through a Web-based system
• Remote access to the climate-control system with alert notifications via a smart thermostat app
• Internet music, WiFi, intercom call buttons and a PA system throughout the buildings

In addition, we included a smart gate that allows for hands-free access with Bluetooth beacons. Customers can use an app to retrieve access codes or view previous entry logs. The system also allows users to communicate with the manager via a one-touch to phone call or discreet e-mail messaging. The cloud-based system requires only an Internet-connected device. Updates are performed automatically through the Web, and an emergency battery backup will automatically open the gates during a power failure.

Implementation Challenges

We faced a few challenges during implementation, especially as some of these systems had never been used in the storage industry before. Luckily, we were able to beta-test a version of our surveillance-monitoring software at a nearby laundromat we owned, which allowed us to work out some of the bugs and determine what was needed to install it at the storage facility.

It also gave us some time to train ourselves on how to use the software effectively and prepare for training staff at the store. We didn’t have a manual yet for how to use these new systems because we had just learned how to use them ourselves! So, we sat down to work with the site managers in person and taught them one-on-one.

Looking back, we probably would’ve set up the smart surveillance system a little differently. However, we still feel it makes the manager’s job much easier and more efficient.

Customer Response

Smart cameras have been a big selling point for our customers. People like knowing the cameras are always watching their stuff, even when the manager is unavailable. They also love the gate-access app, which allows them to manage their account. With the use of the company website and app, they can rent their own unit and access the facility with very little help from management.

There’s a bit of a learning curve, but our staff enjoys the time they get to spend teaching customers what’s available and how easy it is to use. We also offer key-fob access for customers who aren’t tech-savvy but still want hands-free gate access over a memorized code. We’ve found it’s good to offer backup options, including a traditional keypad.

The Next Project

In planning our next site, we’ll use the same smart systems. They’ve made everyone’s jobs easier and allowed us to promote and rent up the facility faster.

For example, in the past, if there was a security incident, we had to dig through hours of footage to find out what happened after the fact. Now, our cameras they’re being watched for us and we’re alerted when there’s something we need to see, even if we aren’t on site. We used to have to walk around the facility with a stepladder, unlocking thermostat lockboxes to check on the climate systems and make setting changes. Now, it’s all done through our centralized access-control system from anywhere with Web access!

Having the latest cloud-based systems gives us freedom to focus on more important things—and we don't need a desktop computer in the office to use them! This allows our employees to work from a cellphone or a tablet, and customers don't need to be in the office to do business with us.

My advice for operators who are interested in new technology is to attend industry tradeshows and educational seminars. High-tech features is what will set you apart from your competitors. Customers readily embrace them, as they all use smartphones and most are already enthusiastically using smart technology at home.

Matt Clark is president of Pack, Stack & Store Inc. He started his career in the industry as a store manager for Public Storage in 1999 and has been involved in the setup and operation of more than 50 facilities for operators big and small. His business partner is Brian Harrington, a general contractor who’s helped develop more than 100 storage projects including ground-up construction and conversions. For more information, call 847.659.9006; e-mail [email protected]; visit www.packstackstore.com.

Self-storage real estate firm Midcoast Properties Inc. has hired Bobby Moss as a new associate. His commercial real estate experience includes a focus on self-storage and manufactured-housing communities, according to a press release.

Moss spent 25 years as an information-technology professional before transitioning into commercial real estate investing and sales, where he could apply his consulting, sales and management skills, the release stated. He’s a licensed real estate professional in Alabama, the Carolinas and Georgia.

A native of North Carolina, Moss lives in Upstate South Carolina. He earned a bachelor’s degree from Furman University in Greenville, S.C.

Midcoast provides brokerage services to self-storage investors and owners in Alabama, the Carolinas and Georgia.

Source:
PR Urgent, Bobby Moss Joins Midcoast Properties Inc.

Cube Self Storage, which operates facilities throughout England and Southeast Asia, is adding co-working office space at its facility on the Bellbrook Estate in Uckfield, England. The new service is expected to open in March, according to the source.

 The company designed the offering to provide local professionals with a “comfortable, friendly, office solution with flexible rates,” the source reported. The space will include high-speed Internet, kitchen facilities, a “breakout” area, and meeting rooms.

 Cube officials hope the co-working space will be attractive to its business customers as well as the wider community. It’ll be ideal for networking with likeminded individuals, said Mark Hendley, group property director.

Founded in 2003, Cube operates self-storage facilities in East Sussex, Kent, South East and West Sussex, England, as well as Kowloon, Hong Kong, and Kuala Lumpur, Malaysia. The company also operates Edward Baden Group, a commercial and personal-property relocation company; Cube Find Art Services, which delivers bespoke fine art management solutions for museums, galleries, international corporations and private collectors; Cube Records Management, for professional archiving of documents; and Easycrate, which offers a range of crates and crate-hire packages.

Source:
Uckfield News, Building Work Under Way to Create Co-Working Space in Uckfield

Commercial real estate firm Marcus & Millichap has released a “2020 Self Storage Investment Forecast” focused on industry activity in the U.S. The 52-page PDF report offers analytical insight on a national, regional and local level. Produced by the firm’s National Self-Storage Group and released through its research-services division, it’s available for free download from the company website.

The publication addresses:

• Economic drivers for 2020
• Supply, development and rental trends in numerous markets
• Capital-markets trends
• Demographic impact on rent growth
• Investment trends
• Supply trends

“Rampant new construction over the course of this expansion cycle has raised caution among self-storage operators, but after peaking in 2018, new additions have begun to recede,” the report states. “Supply additions in 2020 are forecast to taper from last year’s level to 85 percent of what was delivered in 2018. Though still elevated by historical standards, development will likely be further curtailed as lenders tighten construction capital, costs rise and lease-up periods extend. That said, most of the markets currently facing oversupply risk will eventually absorb the overhang as economic growth fuels household formation and other demand drivers.”

Marcus & Millichap produces more than 2,000 research products each year, according to company officials. Its research-services department offers a range of publications, from national economic perspectives to market-specific analyses. Its website enables users to search for reports by property type, location or keyword.

Founded in 1971, the company is a commercial property-investment firm with more than 2,000 investment professionals in offices throughout Canada and the United States. It closed nearly 9,500 transactions in 2018 with a value of approximately $46.4 billion.

Source:
Marcus & Millichap, 2020 Self-Storage US Investment Forecast

B. Wayne Hughes Sr., the co-founder self-storage real estate investment trust and management firm Public Storage Inc., is receiving the 2019 John W. Galbreath Award for outstanding entrepreneurship in the equine industry by the University of Louisville College of Business equine-industry program. With interests in horse racing, Hughes has owned Spendthrift Farm in Lexington, Ky., since 2004.

Hughes is credited with creating popular programs to encourage horse ownership and breeding. “B. Wayne Hughes helped shift the breeding-industry paradigm significantly in the last decade,” Sean Beirne, director of the college’s equine program, told the source. “He has not been afraid to rethink and experiment to lead the industry in a new direction.”

“Thoroughbred horse racing has been a tremendous passion of mine ever since my father took me to the races as a young boy. It’s something he and I got to share together, and I’ve been fortunate to be able to make it a large part of my life and share it with so many that are dear to me,” Hughes told the source. “There are few thrills greater than what horse racing can provide, and it is our responsibility to do a better job of improving this great sport so that future generations can enjoy it as much as John Galbreath did and as much as I have.”

The Galbreath Award has been given annually since 1990 to honor entrepreneurial leadership and positive impact on the equine industry. Galbreath was owner of Darby Dan Farm in Lexington and a former Churchill Downs chairman, according to the source.

Hughes will be honored during a dinner and award presentation on March 2 at the PNC Club inside the university’s football stadium.

Hughes and business partner Kenneth Volk Jr. opened their first Public Storage location in 1972. Hughes stepped down as company chair in 2011, but the family retains 14 percent of the company, according to a recent report.

Based in Glendale, Calif., Public Storage has interests in 2,468 self-storage facilities in 38 states, with approximately 167 million net rentable square feet.

Source:
The Lane Report, UofL Announces Winner of 2019 John W. Galbreath Award

Take a moment to estimate how many self-storage facilities are in your market. If you can count the number on one hand, consider yourself lucky. If you need both hands and feet plus the hands and feet of everyone around you, your situation mirrors that of most facility operators.

When coping with an oversaturated market, you must work hard to stand out. A smart strategy is to upgrade your facility with add-on products and services. Not only can they provide customers with things they need and no other storage facilities in the area offer, they give your business new revenue streams. You can introduce one add-on with low overhead or go all out with several targeting a specific demographic. Whichever approach you take, ancillaries will transform your opertion from just another storage business to one that offers something unique, desirable and profitable.

Add-On Options

When considering which add-ons are best for your location, it helps to know your options—and your audience. Not every product and service will work in every market. Let’s start by looking at a few popular profit centers for the self-storage industry. This isn’t an exhaustive list. Operators have explored everything from basic merchandise sales to propane-tank rentals to craft boutiques and eBay sales centers. What could you add?

• Retail sales: Even just a few retail offerings—boxes, tape, bubble wrap—can drive revenue. A retail center allows you to target the public in addition to your tenants.
• Truck rentals: You already know how often people use self-storage during a move. Why not make your facility a one-stop shop by renting trucks? Again, this will appeal to the greater community as well as your tenant base.
• Vehicle storage: This is good for cars, RVs, boats, motorcycles and anything else with wheels. You can offer a something as simple as an outdoor lot or canopies to something as sophisticated as a garage-style unit with power. Depending on your market, you might specialize in one vehicle type and offer complementary products and services. For example, if you cater to RVs, consider a wash bay, dump station, valet service and items people need when they go on the road such as such as antifreeze, tools and camping gear.
• Wine storage: This will require wine lockers in a range of sizes to accommodate collections from personal aficionados to restaurant owners. You’ll also need strict temperature and humidity controls to keep the storage at 55 degrees, with flexibility for varietals that need higher or lower temperatures. Humidity must be kept at 60 percent to 80 percent. You’ll also need a back-up generator if you don’t already have one.
• Records storage: This is great for business owners or individuals who need a place to store important documents and files. With this type of storage, you’ll offer units that prioritize security and confidentiality. You might also offer document shredding for free or a small fee.
• Office space: Renting out units for office use will require power, Internet, phone lines, adequate lighting and other features that make for a comfortable atmosphere. You might consider adding a business center with a conference room, printing and mailing, delivery acceptance, and warehouse space.

The Upsell

So, how do you sell your new products and services to prospects and existing tenants? Start by identifying customers with a specific need. For example, a renter might mention the RV he just purchased. A student may tell you about the new apartment he’s moving into after graduation. Listen to what people say. Assess their needs, then explain how your product of service will benefit them.

Be friendly and work it into conversation naturally. When giving a facility tour or guiding someone through the lease process, ask open-ended, noninvasive questions. This will organically allow you to make suggestions. Always explain why a service is great, why it costs what it costs, and why it’s better for a customer to get that service from you than anyone else.

This method could take some practice. Try role-playing and make sure everyone who works at the facility knows the ins and outs of your add-on offerings.

Community Outreach

If you’ve done your homework and researched your market, you know there’s a group of people near your self-storage facility who would benefit from the exact add-on you offer. Maybe they’re actively seeking that amenity, or maybe they don’t even know they need it yet. Either way, you can find those customers by getting involved in your community.

Let’s say you offer wine storage. Start by hosting events for wine lovers. You can partner with a wine club or retailer to offer tastings and meet-ups. If you’re offering vehicle storage, host a gathering for full-time RVers or a car show. Offer up your facility as an event space for clubs and provide snacks.

You can also attend community events to bring customers to you. Are you renting office space or offering document storage? Go to networking events for professionals and entrepreneurs. Check out chamber of commerce events and be ready with your business card. Reach out to apartment complexes, schools and RV dealerships about opportunities and let them know that you’re available to host events or have a table at an event they’re hosting.

Marketing

Building community partnerships may seem like a lot of marketing work on its own, and on a grassroots level it is; but you need to do way more than that to get the word out. Consider the following:

• Your website should include a page devoted to each add-on you offer, including keyword-rich content, colorful photos and a call-to-action prompting the customer to rent online or call for more information.
• You want to be shouting from the digital rooftops of your social media pages. Post information about your products and services on Facebook. Create Facebook events for any your facility hosts.
• Create blog posts in-house or by using freelance writers. This content should be brief (about 500 words), keyword-rich, informative, engaging and filled with links that prompt customers to rent a storage unit online.
• Send press releases to local media.
• E-mail an announcement to existing tenants.
• Update your facility signage to spotlight add-on services.
• Put up fliers.
• Take out ads in local newspapers.
• Purchase billboard space.
• Consider a referral program for those who use your add-on products and services. For example, if an RV-storage user refers another RV owner, you might offer both a one-time discount on a month’s rent.
• Always mention your add-ons to new and existing customers!

Going Public

Earlier, I mentioned the chance to push beyond your customer base by targeting the public with your add-on product or service. This approach can open many sales opportunities. Of course, it’s natural to focus on customers who actually need storage units, but even those who don’t need storage—right now—might need other things you offer. An RV owner might still need a dump station or supplies. Small-business owners still need a place to ship packages. Wine lovers still need decanters and bottle openers. People who are moving still need trucks.

Make it known that your add-on products and services aren’t just for renters, and you’ll cast a wider net. As an added bonus, those who just come to you for these things will think of you first when they need self-storage!

By now, you should have a better knowledge of the add-ons you can offer and an inkling of which might be best for your operation. Do your due diligence by researching the needs of your market and how you can address them. Start small by offering one add-on at a time. Be comprehensive with your marketing, online and off, and track your progress. The result should be a viable extra revenue stream that can complement your self-storage business and give customers another reason to choose you over the competition.

Krista Diamond is the content team leader for Tenant Inc. Headquartered in Newport Beach, Calif., Tenant Inc. develops real estate property technologies, creating a seamless user experience. Its open platform is designed to create customizable prop tech solutions. For more information, e-mail [email protected]; visit www.tenantinc.com.

StorageMart, which operates more than 200 self-storage properties across Canada, the United Kingdom and the United States, is supporting Barnado’s, a charity that supports disadvantaged children and families in the U.K. The operator will provide the organization with free storage at its facility in the Knaves Beech Industrial Estate in Loudwater, England. It’ll also raise funds and volunteer time, according to a source.

Fundraising activities will include running and other physical-challenge events. For donations, StorageMart will give £15 for each online review it receives at its U.K. facilities. Employees will have opportunities to volunteer through gardening and decorating programs.

“We’re thrilled to be partnering with a charity that makes such a long, lasting and positive impact on young people’s lives,” said StorageMart Regional Director Dan Saunders. “Partnering with Barnardo’s will give us opportunities to not just raise money for much needed services in our community, but to encourage our store teams to get involved with events and fundraising activities to create a closer and more meaningful involvement in our communities.”

“We are delighted to be partnering up with StorageMart, [which is] focused on building strong relationships and giving something back to the community. It is this ethos [that] makes them a perfect partner for Barnardo’s,” said Paul Beard, the charity’s regional fundraising manager.

Founded in 1867, Barnardo’s provides programs for families dealing with domestic abuse, illness, alcohol and substance abuse, homelessness, and more.

Founded in 1999 and based in Columbia, Mo., StorageMart is privately owned and operated by the Burnam Family, which has been in the storage industry for three generations. Its portfolio consists of more than 12 million square feet of storage. It serves more than 75,000 self-storage customers, and operates in Chinese, English, Punjabi, Quebecois French and Spanish.

Source:
Bucks Free Press, Children’s Charity and Storage Firm Join Forces

Police have arrested a man they believe broke into several units at two self-storage facilities earlier this month in Jacksonville, N.C. The burglaries took place on Jan. 2 at Autry's Self-Storage at 1 Bailey Drive and Richlands Mini Storage Inc. at 7369 Richlands Highway.

Investigators were able to identify the thief through video-surveillance footage from the facilities that showed a white male breaking into units. Police identified the person as Ryan Gregory Justice, 33. He was arrested on Jan. 24 and charged with breaking and entering a building, felony larceny, larceny of a firearm, possession of firearm by a felon, and misdemeanor larceny. He’s being held at Onslow County Detention Center on a $35,000 bond.

Opened in 1984, Autry's offers climate-controlled and drive-up units. It also provides moving and packing supplies. Security measures include gated access and video cameras.

Richland’s contains 631 climate-controlled and drive-up units. It also offers large units, gated access and security cameras.

Sources:
WITN, Justice Found in Onslow County, and Arrested
WNCT, Sneads Ferry Man Arrested for Businesses Break-Ins