Office tenants are examining how much space they really need in the pandemic-driven shift to remote work and that has caused vacancy rates to surge in metro Denver and across the country.
Colorado’s Health Capitol has found a way to fill up vacant space, save nonprofits significant money on their leases and create a venue for in-person collaboration across different organizations.
“Now is the peak time to get cheap rents, but the secret sauce to this is the community,” said Jake Williams, CEO of Healthier Colorado, who helped create the Denver-based co-working space for about three dozen mostly health care-related nonprofits.
Some of the tenants filling space once occupied by the Denver office of the Equal Employment Opportunity Commission on the fourth floor at 303 E. 17th Ave. are Connect for Health Colorado, The Bell Policy Center, Healthy Air and Water Colorado, One Colorado, Prime Health, Colorado Consumer Health Initiative and COPIC.
“It is a cool space and we have a vision of this as a national model,” said Dustin Whistler, a principal at Forte Commercial Real Estate, who has helped tenants transition into the new space.
Nearly a fifth of office space in metro Denver sits vacant, and closer to a third of space in downtown Denver, Whistler said. Colorado’s Health Capitol, by contrast, is 97% full and cash flow positive in its first year.
Executives at nonprofits realize that remote work, on some level, is here to stay, and they now require less office space, which aligns with the need to reduce overhead to cope with tighter budgets. At the same time, for groups focused on reaching out to the larger community, remote work arrangements can feel isolating and counter to their mission of collaboration, Williams said.
Whistler said nonprofit groups are less likely to take higher-end office space in newer buildings to begin with. Many have dated furniture, often second-hand or donated, and they try to get by on a shoestring so more money is available for their mission. Convincing remote staff to return to a dingy space in a tired building is a harder sell.
But what if they could offer a more attractive space? Rotating art displays decorate the floor and the furniture is newer and modern. There are informational meetings to help the staff learn and better manage their operations, another plus of so many groups sharing a common space.
A key way Colorado’s Health Capitol saves tenants money is through a range of shared services, including a shared receptionist, a common kitchen for employees, as well as shared copiers and other equipment. A small studio to record podcasts and a large meeting room are added features that many smaller organizations can’t afford on their own. And the meeting room is available to host members or to rent for other social events outside office hours.
“Colorado’s Health Capitol has become its own member of the community,” Whistler said.
The location of the workspace isn’t random. It is within walking distance, two blocks, from the state Capitol, allowing for easy access to the legislature when it is in session and a convenient place to host elected representatives and government officials year-round. Groups in other parts of the state are using the location for their lobbying efforts.
Ryan Biehle, CEO of the Colorado Academy of Family Physicians, which counts 2,500 members in the state and started in 1948, said the group thought long and hard about selling the two office condos it owned and consolidating into a smaller space.
But the academy had too much space, about 3,000 square feet, for its staff of four. Biehle said he also found his time tied up in making sure the HVAC system was up to snuff, that the WiFi signal was strong enough and that enough coffee was in stock — mental energy that could be better spent elsewhere.
The group sold the office condos in 2022 and invested the proceeds, using the income generated to cover the new lease, which is better aligned with the space it requires.
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Biehle and his team often drove from Aurora to the Capitol anyway during the legislative session, so the location was ideal. And the biggest benefit has been the ability to pool resources with other groups rather than operating in what had been a silo.
One example includes helping seniors who struggle with a lack of adequate heating because of higher prices, Biehle said. When patients raise the issue, which can contribute to health problems, their doctors can inform them about the resources available through Energy Outreach Colorado, another tenant.
“We wouldn’t have just gone to any shared workspace. This was more affordable than other shared spaces and it was unique,” he said.
The Colorado Health Foundation also funds a community access program that provides space to smaller groups with limited resources, the kind often run by volunteers out of home offices.
“It is not cost-effective for us to rent a space. We are rarely in an office because we are out doing something,” said Robin Bruce, president Colorado Council of Black Nurses, an all-volunteer organization with 57 members that will celebrate its 50th anniversary in 2023.
The council now has access to desk space, the larger meeting room, the podcast room, as well as the expertise of other tenants. Having a constant place to land rather than relying on the ad-hoc goodwill of others has been a huge help.
“They are serious about giving to the community, especially to us smaller nonprofits,” Bruce said. “It is just validating. It is a feel-good place.”
