Xcel Energy-Colorado has pre-leased space in a soon-to-be-completed building in the River North Art District and plans to move out of its headquarters in downtown Denver in 2025.
Xcel, Colorado’s largest electric utility, and real estate firms Ivanhoé Cambridge, Hines and McCaffery said Wednesday that the company has pre-leased all the office space at T3 RiNo, a new six-story, mass-timber building. At 220,172 square feet, Xcel Energy will be the largest office tenant in RiNo, according to a statement by the companies.
About 1,200 employees will be based at the new headquarters.
Work on the building is expected to be completed by the end of the year. T3 RiNo, made of black spruce, is among recent new buildings in the Denver area that are using wood as a way to reduce carbon emissions in construction.
Buildings and construction account for about 40% of the global greenhouse-gas emissions, according to RMI, a Colorado-based research and consulting organization focused on environmental sustainability. According to data from the International Energy Agency, the cement sector consumes about 7% of the world’s industrial energy use and produces 7% of the world’s carbon-dioxide emissions.
The T3 RiNo building features heavy-timber structured design that is “100% renewable, recyclable and nontoxic,” the companies involved in the project said. They expect the building to meet the highest levels of certification for standards of energy efficiency, health and environmentally sustainability.
Amenities include a state-of-the-art conference center, private outdoor terraces on each floor and 5,000-square-foot fitness center. There will be retail space on the ground floor. The is accessible to the Regional Transportation District’s train system.
“As one of the most environmentally friendly developments in the City of Denver to date, T3 RiNo is a natural fit for a tenant customer who shares our commitment to prioritizing sustainability in a tangible way,” said Charlie Musgrave, vice president of U.S. office and life science leasing at Ivanhoé Cambridge.
Xcel Energy has set a goal of producing carbon-free electricity by 2050. The utility filed a proposed energy resource plan with state regulators that says it expects to cut its emissions 87% below 2005 levels by 2030 and produce 83% of its power from clean sources by 2028.
“T3 RiNo will provide several benefits important to our coworkers including more parking, proximity to the RTD light rail system, greater security and more. Being in a single-tenant building allows us to design collaborative workspaces for increasingly interconnected teams,” Robert Kenney, president of Xcel Energy-Colorado, said in a statement.
Xcel is committed to staying in the Denver metro area “as part of our commitment to our communities, service areas and stakeholders,” Kenney said.
The company expects the move to reduce its annual operational costs by an estimated $2.5 million.
Xcel was represented in the transaction by Rick Schuham and Brendan Fisher of Savills. Co-developers, Ivanhoé Cambridge, Hines and McCaffery were represented by JLL’s James Roupp, John Beason, Don Misner and Maddy Stevenson.
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Xcel currently occupies about 300,000 square feet on several floors of a 22-story, 500,000-square-foot glass and steel tower at 1800 Larimer St. The building opened in 2010. At the time, It was celebrated as the first LEED Platinum-certified high-rise in Denver, the highest rating of the Leadership in Energy and Environmental Design program.
News of Xcel Energy’s decision to move its headquarters out of downtown comes as the area’s total office vacancy rate hit 30% for the first time since 1990. BusinessDen reported that vacancy went only as high as 17.4% during the Great Recession.
Downtown offices have been slow to fill back up after the COVID-19 pandemic as people have continued to work from home or returned to the office for just part of the week. The Denver office of the real estate firm JLL said in an analysis of this year’s third quarter that despite reports of return-to-office mandates, the overall office occupancy rate fell for the fifth consecutive quarter.
