Today, one of the biggest contributors to carbon emissions comes from the self-storage industry, producing over 780 million pounds of carbon annually. The main reason for this fact is the constant construction of new self-storage facilities that produce carbon. According to a study conducted by the Washington State Department of Archeology and Historic Preservation, the construction of new buildings, including self-storage facilities, makes up 43% of the world’s carbon emissions.
The self-storage industry has a great deal of demand at the moment. Self-storage centers operated at 95% occupancy in 2021, and developers built 1,290 new facilities that year.
However, this high rate of carbon emissions in the self-storage industry does not need to be the norm. One company, Neighbor.com, is working with residential and commercial property owners to convert under-utilized or vacant space into self-storage space, generating passive income for property owners and reducing carbon emissions in the process, as no new construction is needed.
“We enable homeowners with extra space in their home — whether it’s an attic, a basement, a shed, a garage or even a parking spot — to list that on our website, and we will rent it out for self-storage,” said Neighbor.com’s CEO and co-founder Joseph Woodbury. “And then we also work with large, commercial real estate owners — really any unused space — so big office buildings, big retail strip malls all across the country — and we help fill their space with self-storage.”
By doing so, Woodbury said Neighbor.com has become the first carbon-negative storage service in the country.
“A lot of the focus around carbon is on things like automobiles and other topics like that,” Woodbury said. “But oftentimes, one of the most ignored categories is building emissions.”
As noted in the Washington State Department of Archeology and Historic Preservation study, buildings are responsible for a massive percentage of carbon emissions around the world. Self-storage has been a large component of that, as the fastest growing category within all of commercial real estate for four straight decades. Currently, there are over 2 billion square feet of self-storage facilities in the United States, Woodbury claimed.
“For context, we have more self-storage facilities in the United States than we have McDonald’s, Starbucks, Dunkin Donuts, Burger King, Wendy’s, Home Depot, Walmart and Costco combined,” Woodbury said.
Self-storage facilities, Woodbury explained, are built from concrete and steel, which Fortune called “one of the most intractable sectors when it comes to emissions.” Neighbor.com, however, recycles unused space that’s already built, making it so no new self-storage space needs to be built.
“We’ve calculated that for every unit booked on our platform, that’s roughly equivalent to taking four cars off the road for a whole year,” Woodbury said.
“Every unit we’re able to add to our platform reduces future United States carbon emissions,” Woodbury added. “So by virtue of our business growing, we are reducing carbon emissions.”
For commercial property owners, Neighbor.com could also mean a boon for business. During the pandemic, many commercial landlords who own strip malls or office buildings across the country suffered from loss of income, as their tenants ended their leases and occupancy rates went down.
“We’re able to go to these commercial real estate providers and say, ‘Hey, we can produce predictable cash flow for you. Why don’t we take one floor of your office building and rent it out for self-storage?’” Woodbury explained.
This business dynamic provides commercial property owners with predictable, recession-proof income. Of course, Woodbury noted that with self-storage rentals, landlords aren’t able to make as much per square foot as they would with an office rental. Nonetheless, the owners will often rent out spaces they’ve been unable to lease as offices.
“And we’re able to turn those spaces into cash flow for them,” added Woodbury, “which enables them to be able to keep the lights on and support the rest of the businesses that are in their location.”
“We view ourselves as not only enabling the commercial landlord themselves, but also the other businesses that are there,” Woodbury said.
For commercial property owners looking to lease out empty space and those looking for self-storage options, Neighbor.com provides a good carbon-negative solution, ultimately changing the mindset of development and leasing, even for new buildings.