Last year, WeWork officials touted that the New York-based co-working space provider was on pace to be Denver’s single biggest office space user by 2020.
For those that thought that 606,000 square feet would be enough to meet the shared-office giant’s demand in the market, guess again. On Friday, Denver-based EverWest Real Estate Investors and partners announced they are leasing the entirety of the freshly renovated 86,000-square-foot Junction 23 building just north of Coors Field to WeWork.
With that building in the bag, WeWork officials this week shared updated growth projections for the Denver metro area. Using the company’s preferred metric — total number of desks available to clients — WeWork grew by 100 percent in Denver in 2018, from 2,060 desks at two locations at the start of the year to 4,100 desks in four locations by New Year’s Eve. In 2019, it aims to grow from 4,100 desks to more than 13,000 desks at 11 locations, a growth rate of more than 217 percent. That square footage will eclipse 700,000, officials say.
With Junction 23 secured, the company expects to open two locations in Denver’s booming River North Art District this year. Its first Boulder location is expected to open at the Canyon 28 building, 2755 Canyon Blvd. in September.
“The whole story behind Denver is growth,” Nathan Lenahan, WeWork’s vice president and general manager for Texas and the Mountain West region, said. “It’s (our) fastest growing market in the entire country. I feel like we’re just getting started.”
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Lenahan said it’s not just growth for growth’s sake either. WeWork’s four operating spaces in Denver today — at the Triangle Building near Union Station, the Lab in Lower Highland, Tabor Center and Wells Fargo Center (a.k.a. the Cash Register Building) — have hovered right around full occupancy since the beginning of 2018, he said.
The company got its start catering to independent workers and startup firms looking for built-in amenities and flexible lease terms to accommodate their needs and growth. But in 2019, WeWork boasts a roster of clients that includes 32 percent of all Fortune 500 companies. It has 425 locations in 27 countries, providing clients with drop-in space across the globe.
Facebook and Slack Technologies both broke into the Denver market by leasing space in WeWork locations before laying claim to addresses of their own, Deborah Cameron, the city’s chief business development officer, pointed out. With that in mind, Cameron and Eric Hiraga, the executive director of the city’s Denver Economic Development & Opportunity office, both count WeWork as an asset.
They point to partnerships and efforts the company has made to benefit the larger community like founding its Veterans in Residence program here and bringing the Flatirons School, a highly successful coding boot camp meant to train the next generation of tech workers, to town.
They are not concerned that WeWork’s appetite for space will hurt other companies’ ability to find locations in town. Using numbers from commercial real estate information company CoStar, Hiraga said the city is tracking 46 buildings in the city offering 50,000 square feet of space or more available for lease today.
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The lack of big chunks of available office space is a concern for Denver, according to Steve Billigmeier, an executive managing director for real estate services firm Cushman & Wakefield, based in Denver. Billigmeier, who represented VF Corp. in its lease negotiation for an entire building on Wewatta Street last year, recently wrote about the dearth of large blocks of office space for the Denver for the Colorado Real Estate Journal.
WeWork’s rapid growth doesn’t factor into that problem so much, Billigmeier said. The bigger concern, he said, is that the company is artificially inflating office occupancy figures by taking on real estate it hasn’t yet filled with clients.
“The impact is just fewer options for other users to go lease space,” he said.
