The Babies R Us building, which has two interior levels, will grow to 67,000 square feet with 655 storage units of various sizes in a climate-controlled space. Another 175 exterior storage units with 20,000 square feet will be available on the additional 1.5 acres that Inland purchased.” – Keith Lampi, president and CEO of Inland Private Capital Corp
Two years after a shuttered Toys R Us store in Colorado Springs was remodeled into a self-storage facility, a nearby vacant Babies R Us is getting a similar makeover.
An investment arm of the Inland Real Estate Group of Companies, based in suburban Chicago and one of the nation’s largest commercial real estate firms, has launched a remodeling of the former 62,000-square-foot Babies R Us building, northwest of Academy Boulevard and Platte Avenue.
Inland has partnered with California-based Devon Self Storage to transform the Babies R Us property and an adjacent parcel into self-storage uses, Keith Lampi, president and CEO of Inland Private Capital Corp., said via email.
Devon will serve as the project’s developer, construction manager and property manager and the new self-storage facility will operate under Devon’s name. It’s targeted to open in the first half of 2024, which will position the property to capture new users in the spring, summer and fall, Lampi said.
Inland, through a limited liability company, paid $4.5 million last year to buy the Babies R Us building and its surrounding 3.5 acres, according to El Paso County land records. The company also paid $500,000 for an adjacent, undeveloped 1.5 acres, the records show.
For Inland, the Babies R Us property was attractive for a variety of reasons, Lampi said.
The site lies within a federally designated opportunity zone, where long-term investors qualify for tax breaks.
An Inland-sponsored opportunity zone investment fund targets the redevelopment of what Lampi called “failed prior use” properties within such areas — and Babies R Us would seem to fit that description.
Babies R Us — which billed itself as “the baby superstore” with its baby gear, products and merchandise — and sister retailer Toys R Us, southwest of Academy and Galley Road, closed in 2018; the retail chains went out of business that year, though efforts have been made of late to revive the brands.
The Babies R Us store in the Springs has sat mostly vacant for five years and been a target of vandals; the Toys R Us building reopened in 2021 after it was redeveloped as a self-storage facility by a Denver company.
Babies R Us’ location on the south edge of The Citadel mall is accessible via the shopping complex’s internal road network. The building also is perched on a hill that overlooks Platte Avenue, which makes it highly visible to thousands of motorists who drive by daily.
“Given the property’s exposure, traffic counts and market metrics, it checked a lot of the boxes we look for in evaluating a successful development,” Lampi said.
The Babies R Us store’s previous owner, a California investment group, marketed the property without success to a variety of users, including retailers, he said.
The downsizing and closure of several national retailers over the years and competition from Amazon and other online sellers have made filling empty big-box spaces a tough task, commercial real estate experts have said.
“We continue to see limited retail tenants seeking this type and size of brick-and-mortar offerings,” Lampi said.
“This fact made this a prime target for our investment strategy which identifies assets that experienced prior use obsolescence, acquiring them at an attractive basis and repurposing them into storage facilities. Retail sites make excellent candidates for this strategy given their location visibility and high traffic counts.”
The Babies R Us building, which has two interior levels, will grow to 67,000 square feet with 655 storage units of various sizes in a climate-controlled space, Lampi said. Another 175 exterior storage units with 20,000 square feet will be available on the additional 1.5 acres that Inland purchased.
“One of the differentiating features of this new facility when compared to the competition is the ‘interior drive through lane,’ providing the customer a safe, monitored and controlled environment,” Lampi said.
As Colorado Springs grows, however, self-storage facilities seem to be turning up everywhere. So, does the area need even more?
Yes, Inland believes, based on its research of Colorado Springs.
“Additional considerations that factored into the purchase decision were age of competition, management effectiveness, and use of technology, amenities and customer service,” Lampi said.
“As a result, our analysis supports the expectation for strong and growing demand from users, particularly given the growth the market has and continues to experience.”
