Gas stations heating up commercial market

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Newly opened Kum & Go station and convenience store takes up three lots on Fillmore Street, as the company develops its local presence.

Newly opened Kum & Go station and convenience store takes up three lots on Fillmore Street, as the company develops its local presence.

One segment of the Colorado Springs commercial real estate market is experiencing explosive growth — gas stations.

“It seems like the only thing that’s really moving,” said Lori Ondrick, a retail broker with Quantum Commercial Group.

Ryan Tefertiller, a city planner, said everyone in the planning department has dealt with at least one gas station project in the past year, no matter what geographic part of the city is their individual focus.

He knows of 19 gas station projects that have filed official plans with the city since January 2012.

Most of the growth is coming from one brand’s commitment to the market. Kum & Go, based in Des Moines, Iowa, two years ago announced plans to move into the Colorado Springs market with intentions to build 20 to 25 stores over a five-year period.

The latest store in Colorado Springs brings the total to nine in the city and 49 in the state, said Megan Elfers, a spokeswoman for Kum & Go.

Tefertiller said the city has handled at least 10 plan submissions from Kum & Go since January 2012 and he suspects there might have been a couple before that. Some of those applications could still be in the development phase.

The city has also managed planning documents for three Loaf ‘N Jug gas stations, three 7-Elevens, one Circle K, one King Soopers gas station and one unbranded station during the same time period.

He said he also has been working with Maverick, which would be another new brand to the Colorado Springs market, on a pre-application.

“There’s absolutely an influx,” Tefertiller said. “Up until the last year or two, we would see maybe a couple a year.”

Competition affected

Ondrick said she wondered how these new players could justify moving into this market so aggressively when there didn’t seem to be a shortage of existing gas stations.

“You wonder about how it’s going to impact existing stations,” she said.

Tefertiller said he thought it was an interesting business choice for the new companies to move into areas that already offered gas services.

“They certainly aren’t shy about opening a new store a block away from an existing business,” Tefertiller said. “I wonder if they see some of our existing gas stations as inadequate.”

Kum & Go markets itself as much more than a gas station, which Elfers said gives the store a competitive edge over neighbors.

The 5,000-square-foot stores advertise a vast selection of goods and even sell homemade pizza from their onsite kitchens. The stores are all Leadership in Energy and Environmental Design-certified and outfitted with environmentally conscious fixtures like Solatubes and skylights for natural lighting during the day, low-flow toilets and water faucets and other energy-efficient equipment. And there are plenty of gas pumps outside, Elfers said.

“They have a lot more fueling stations, about twice what the typical 7-Eleven has,” said Mark Useman, a retail broker with Sierra Commercial Real Estate who represents Kum & Go locally.

“They develop larger sites that offer more convenience and don’t feel so cramped.”

The new store that just opened at Fillmore and El Paso streets took three lots, Useman said.

“They’re picking very good strategic locations,” he said. “And it’s not just in the new growth areas. They’re in older infill areas, too.”

City’s attraction

Kum & Go president and CEO Kyle J. Krause said in a statement that he was attracted to the Colorado Springs market because it seemed poised for future growth and the company enjoyed success with its other Front Range and mountain-town stations.

“We were also impressed with the strong sense of family and core values that clearly resonates throughout this area,” Krause said. “Whenever we visited Colorado Springs, the friendliness of local residents as well as the professionalism of the business leaders and elected officials was visible to us from Day One.”

The company is a family-owned business that has expanded throughout the Midwest and has had a lot of success in secondary, tertiary and smaller markets. Kum & Go has locations north of Denver and in some of the smaller mountain sites that it bought and took over, but none in Denver proper.

The expansion in the Colorado Springs market is a big commitment to build a presence from the ground up with brand-new stores, Useman said.

With the nine locations Kum & Go has finished so far, Elfers said the plan remains to open another 10 to 15 within five years.

Useman said the city has been helpful throughout the process with Kum & Go.

“They’re making a pretty significant investment in Colorado Springs,” he said.

Each location requires a big capital investment in land acquisition and construction.

“And then they’re hiring a lot of employees,” he said. “You figure 20 to 25 per store.”

Useman says he hasn’t previously seen a rapid expansion into our market like this.

The only thing to rival it, he adds, are the new Wal-Mart neighborhood markets, which represent the expansion of an existing brand.

“It’s nice to see someone new coming in,” he said.

2 Responses to Gas stations heating up commercial market

  1. We need a few more gas stations along 24 between Colorado Springs(Highway 94) and Peyton, CO. King Soopers, Lowes/Home Depot and a Target Would be nice too! :)

    Brian Lackey
    April 23, 2013 at 2:19 pm

  2. I’ve been extremely impressed by Kum & Go’s foray into the Colorado Springs market. They’ve done a tremendous job of upgrading drab and deteriorating street corners that have been vacant for years or even decades. Their gas pumps are all very modern, their attendants all wear clean uniforms with crisp white shirts and ties, and their convenience stores have excellent selection and are very clean, well-lit, and inviting. I’m a BIG fan of Kum & Go. And I never thought I’d say that about a gas station! What a wonderful addition to Colorado Springs. They have my full support.

    Ron Stauffer
    May 2, 2013 at 11:12 pm