The growth of Colorado companies working in space is driving an increasing need for space on the ground to support operations taking place hundreds of miles above the Earth.
Colorado is second only to California in the size of its aerospace industry and real estate agents are working with companies looking for new buildings to make room as they continue to expand.
“There’s a lot going on with aerospace and it’s not going to stop,” said Matt Harbert, vice president at Raise Commercial Real Estate.
About 23% of Harbert’s current work involves the aerospace industry, according to an analysis by Raise. Colorado has been home for a while to some of the larger, well-known aerospace companies, but Harbert said “the startup ecosystem” is spurring the industry’s expansion in the state.
“We’re seeing an incredible amount of startups that we had not seen five, seven years ago. They’re either starting here or moving from California,” Harbert said.
At least three aerospace companies recently moved into new spaces of 100,000 square feet and larger, Harbert said.
A report by the Metro Denver Economic Development Corporation and the Colorado Space Coalition said there are 290 aerospace companies in Colorado and more than 500 companies that provide space-related products and services. The analysis said employment in the sector grew 11.2% from 2019 to 2020 in the nine-county Denver area and northern Colorado and grew 30.1% from 2015 to 2020.
Colorado has the country’s highest concentration of private aerospace employees, according to the report. In 2020, 33,460 people were directly employed by the aerospace industry. The Metro Denver EDC analysis said 62,270 private and military workers in aerospace support an additional 170,340 workers in industries throughout the state, bringing direct and indirect employment to 232,610 workers.
The industry’s “hyper growth” over the last couple of years started around the beginning of the coronavirus pandemic, said Frederic de Loizaga, first vice president with the commercial real estate services and investment firm CBRE in Denver.
“Aerospace was one of the bright spots in the whole Denver metro area and all the way down to Colorado Springs,” de Loizaga said. “Looking at it from a real estate perspective, it’s great to have the industry here. We as a state are very lucky to have the concentration of aerospace companies that we do.”
Colorado’s aerospace sector has been anchored by several large companies, such as Ball Aerospace. Lockheed Martin Space, Northrop Grumman, Raytheon, Sierra Space and United Launch Alliance.
“When you have all these big players, you also attract the smaller aerospace users as well that want to be in close proximity to the bigger players,” said de Loizaga, who specializes in working with the industry.
Harbert said Colorado benefits from having had both a strong private and defense aerospace presence. “These companies want to be around each other for the collaborative piece. They want to be around the startups and the bigger names we have.”
Colorado’s strong space economy was a boon for York Space Systems, which started in Denver in 2012. Dirk Wallinger, CEO and president, said the company is able to tap into the “tremendous amount of talent and capability” present in the state.
“We’ve also brought a lot of people to the state as well because it’s just a great place to be,” Wallinger said.
York Space, which manufactures small satellites for government and private clients, recently moved into a 140,000-square-foot building in the Denver Tech Center. The company has three other facilities in downtown Denver that total about 50,000 square feet. One is a research and development site in the Aerospace and Engineering Sciences Building at Metropolitan State University of Denver.
Wallinger declined to give specifics, but said York’s workforce has grown 300% year over year for the past three years and revenues have increased 250% year over year. The company’s goal is to be able to produce 750 satellites a year by the end of 2023 or sooner.
The kinds of buildings that aerospace companies need run the gamut, Harbert said. “What’s unique about aerospace is they typically need both manufacturing, industrial-type buildings and offices,” he said.
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That usually requires a building with high ceilings. One option is to add a mezzanine level for the office space.
De Loizaga said some companies need “clean rooms,” or a controlled environment to keep out dust and other particles from a manufacturing area. Secure areas are often required to protect work on defense and national security projects.
The real estate industry is seeing aerospace companies moving into new parts of the Denver area and Colorado.
“Most of the activity was between Colorado Springs and Denver. That was really the corridor for aerospace,” Harbert said. “Now, what we’re starting to see is that corridor go further up to Boulder. We have seen a lot more activity along the U.S. 36 corridor.”
