When it comes to the commercial real estate industry, large, box-like warehouses and distribution centers aren’t as flashy as new-to-market fast-food restaurants, gleaming office buildings or trendy shopping centers.
But industrial buildings increasingly are in demand among e-commerce retailers who want to have a place to store and ship merchandise, with the goal of speeding its delivery to nearby customers who’ve made online purchases.
Now, one suburban Denver company plans to develop a multi-tenant distribution center on Colorado Springs’ east side, which it expects will be the first of multiple projects in the area.
Representatives of Triumph Capital Group of Greenwood Village have submitted a proposal to Springs officials to build a 265,274-square-foot distribution facility on nearly 18 acres southwest of Powers Boulevard and Platte Avenue. Triumph paid $4.2 million for the property this year, El Paso County land records show.
The company, which acquires and develops warehouses and distribution centers and has facilities in Denver, Texas, Tennessee and Ohio, believes the time is right to expand to Colorado Springs, said Paul Ruff, Triumph’s founder and managing partner.
“There’s been a movement over the past several years to move inventory closer to population densities so that delivery can be more efficient and quicker,” Ruff said. “There is an interest in the logistics industry to service Colorado Springs from Colorado Springs, rather than servicing it from Denver.”
The desire on the part of retailers and other businesses to sell products online and ship them quickly to local customers has accelerated over roughly the last decade.
Online giant Amazon now has its fulfillment centers and smaller sorting and delivery facilities nationwide; it opened a 3.7 million-square-foot fulfillment center near the Colorado Springs Airport last year, where it stores and ships products throughout the Springs and southern Colorado.
Smaller retailers, too, want facilities to warehouse and ship their products, while homebuilders and other construction companies need storage space for materials they haul to job sites.
Many shopping center, apartment and office developers cite the Springs’ strong economy, desirability as a place to live and available workforce as reasons they expand to the area.
Ruff acknowledged Triumph wouldn’t consider Colorado Springs if it didn’t have a decent economy and growing population. Yet the company’s focus on developing in the Springs is more about providing distribution facilities for retailers than the city’s quality of life, he said.
“We’re in the business of helping retailers and logistics companies get products to people rather than trying to say, gee, ‘we want to put down roots and this is a good place because we want to attract a bunch of good employees,'” Ruff said. “That’s not really what our customers, our tenants are looking for. They’re just trying to figure out the best way to get stuff to people that want it.”
Triumph expects to house multiple tenants — possibly three or four — in its Colorado Springs distribution facility, which still could change in size and scope, Ruff said. It won’t be Triumph’s last distribution center in the Springs area; when the company enters a market, it tries to build a critical mass of facilities, he said.
The company’s distribution center will be built as a speculative project — without users already in place — though Triumph has spoken to companies with whom it has “deep relationships” and who could be potential tenants, Ruff said.
A smaller parcel that’s part of Triumph’s land purchase at the site also could be developed as a build-to-suit project for a specific user, he said.
Triumph likes the east side site because it provides access to the city from multiple directions on major roadways, such as Powers and Platte, Ruff said.
Triumph also was attracted to the site because of a Platte Avenue improvement project that will add a signalized intersection at Space Center Drive, Ruff said.
The company plans to extend Space Center Drive south to its site, which will create a competitive advantage and make it easier for vehicles to exit and deliver products around the city, he said.
In a best-case scenario, Triumph plans to break ground in October and deliver the building to tenants around August 2023, Ruff said.
