Efficiency in Commercial Real Estate Conversion

Global Storage Partners specializes in identifying and transforming underutilized properties into modern self-storage facilities that meet the needs of cities and communities. Global Indy represents a successful conversion of a vacant big-box retail store into a climate-controlled self-storage facility in the heart of Indianapolis, Indiana. As the 18th largest city in the United States and the 3rd largest in the Midwest, Indianapolis offers a vibrant and growing metro area with over 2.1 million residents. The city has undergone significant revitalization efforts, earning a reputation as one of the most livable cities with a vibrant downtown area.

Global Indy I is strategically located south of downtown Indianapolis, boasting prime exposure on Madison Avenue, where over 17,217 vehicles pass by daily. With over 90,000 homes within a five-mile radius and minimal competition for climate-controlled self-storage, the project was poised for success. The neighborhood has long been established, but it is slowly reviving as younger families give this aging suburb a second wind. 

The average occupancy of storage facilities nationwide is 96.5 percent, with the top five reasons for use being moving purposes, lack of space at home, change in household size, downsizing, and business storage. Therefore, one thing we always consider when planning a self-storage conversion is the shifts in population and how we can support smoother transitions for Americans on the move. 

In the following case study, we’ll go into detail on one of our earliest conversions, with an immediate turnaround upon completion of the project. By parceling the surrounding parking area into two additional commercial parcels that were sold, we were able to provide additional value for our investors. 

Meeting the Needs of Garfield Park

Garfield Park is one of Indianapolis' oldest and most charming neighborhoods, known for its historic homes, vibrant community, and the namesake Garfield Park, the city's oldest public park. Located just south of downtown, the neighborhood offers a blend of urban living and natural beauty, with tree-lined streets, arts and cultural events, and a strong sense of community. As a neighborhood with quintessential Midwestern charm, it saw growth through the late 2010s, creating opportunity for self-storage.

In March 2017, Global Building identified a vacant Kmart retail store as an opportunity to repurpose the large, underutilized space. The challenge was to convert the 153,866 square-foot retail building into a modern self-storage facility that could meet the demands of the local market while adhering to budget and timeline constraints.

Kmart, once a retail giant in the United States, went out of business due to a combination of factors that undermined its competitiveness and financial stability. These include:

1. Failure to Adapt to Market Changes: Kmart struggled to keep up with the evolving retail landscape, including the rise of e-commerce and changes in consumer preferences. It lagged behind competitors like Walmart and Target in modernizing stores, improving customer service, and investing in technology.
   
   
2. Poor Financial Management: Kmart faced financial difficulties due to poor management decisions, including over-expansion and a lack of focus on core operations. The company went through multiple bankruptcies, the first in 2002, which weakened its position in the market.
   
   
3. Increased Competition: The rise of big-box retailers like Walmart and Target, which offered better prices, a wider selection of products, and more attractive shopping environments, led to a significant loss of market share for Kmart.
   
   
4. Brand Perception Issues: Over time, Kmart's brand became associated with outdated stores and a subpar shopping experience, which further alienated customers and hurt sales.
   
   
5. Merger with Sears: Kmart's merger with Sears in 2005 under the leadership of Edward Lampert was intended to create a retail powerhouse, but instead, it resulted in the decline of both brands. The combined entity failed to reverse the downward trend, leading to store closures and further financial losses.
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Ultimately, these factors contributed to Kmart's decline and eventual exit from the market, leaving only a few stores still operating by the mid-2020s.

A Quick Self-Storage Conversion

The conversion was completed in September 2018, transforming the former retail space into a 115,670 square-foot self-storage facility with 960 units of varying sizes, catering to a diverse tenant base. The project was not only completed on time and within budget, but also generated interest from buyers during the construction phase. While Extra Space was originally the chosen buyer, Global successfully accepted an offer from Store Space, highlighting the value and demand for well-executed self-storage conversions.

However, aligned with our usual strategy, there was also a gas station as part of the original purchase. After the self-storage conversion, we removed the gas station, cleaned up the environmental issues and subdivided the land, which provided two additional parcels along Madison Avenue. Subsequently, Store Space acquired the additional parcels in December 2021.