Driving around suburban Boston, I see a different yard accoutrement that’s fast becoming a sign of the slow housing market: PODS. Depending on where you live, you may not be familiar with the Portable On Demand Storage brand of storage containers. That’s likely to change especially as the company continues its nationwide expansion and as desperate homeowners—looking for any advantage they can get in the soft housing market—seek to de-clutter and spruce up their houses for resale. While the housing slowdown isn’t altogether good for PODS, it’s found a way to grow.
PODS began its life in Florida in 1999 as a traditional storage enterprise, the kind that operates those sprawling exurban facilities where Americans stow all the junk they’ve decided they don’t want in their basements and garages. Then, like the first pizzamaker who dreamed up the idea of pizza delivery, PODS founder Pete Warhurst decided to try marketing storage-to-go. Instead of homeowners stuffing their cars and driving to a storage center, PODS delivers walk-in containers by truck and drops them off in a homeowner’s driveway and, in some cities, outside their apartment buildings. Users can load it at their leisure, keep it parked in their driveway, have the company haul the container back to a warehouse, or even transport it to another address. Monthly rentals run between $100 and $150 a month.
But as home sellers face more pressure to make their property stand out amid the market’s glut, a new group of professionals is utilizing the PODS concept: home stagers, interior-design specialists who help sellers lure buyers. “One of the things real-estate agents tell you is you have to de-clutter,” says Linda Bauer Darr, president and CEO of the American Moving and Storage Association. “In a down housing market, these containers play a role in helping you get your home ready and increasing the chances it will sell.”
For container companies like PODS, the popularity of their products for this new use is a bit of good news in the larger moving-and-storage industry, where business is soft. Industrywide, corporate moves are off by about 5 percent so far this year, and revenue from moves paid for by homeowners themselves are off by nearly 10 percent, Darr says. But against that backdrop, storage containers are helping fill a niche. “The more people that move, the better off we are,” says PODS chief operating officer Darrin Campbell. “But many people use our products to stage their homes … [enabling] the storage side of the business to stay relatively bullish.”
For evidence of the trend, go to the Web. On home stagers’ websites, references to (and coupons for) PODS are ubiquitous. PODS isn’t the only player in this industry. By one count, at least 150 companies—bearing names like Pack Rat and BoxCart—operate in the container-delivery niche. But with more than 110 franchisees across the country who together own 130,000 containers, PODS is by far the largest player. Although the privately-held company wouldn’t discuss its finances with NEWSWEEK, its hometown Tampa Tribune recently reported that annual revenues should hit $340 million this year.
Beyond staging, PODS play another role in the nation’s relationship with its homes: as renovation receptacles. Families who are undergoing big remodeling jobs often use PODS to hold possessions they clear out from the part of the house that’s undergoing construction.
But even as PODS’ business grows, its renovation-related business is likely to lag. Last week researchers at Harvard University’s Joint Center for Housing Studies reported that home-improvement spending will likely drop by 2.3 percent in 2007. Based on data from its leading indicators, the Center expects home improvement spending to decline “well into 2008.”
“The No. 1 myth is that home remodeling is a countercyclical industry,” says Harvard’s Kermit Baker, who researches national renovation trends. While Americans will still replace their roofs and furnaces despite slowing home sales, the number of people doing more discretionary remodels—like kitchens and bathrooms—will fall along with the housing market.
But for the people at PODS, so long as people with homes to sell need a place to store the stuff they can’t bear to part with—old Boy Scout merit badges, high-school yearbooks and treasured bottle-cap collections—a lot of calls will keep coming in.
