Chipotle tries to unload HQ-to-be

Chipotle signed a lease for multiple floors in the new 40-story tower at 1144 15th St. in Denver, only to decide months later to instead move its headquarters to California. Photo by Thomas Gounley.

Chipotle is looking to sublease its space in Denver’s newest skyscraper, which the company committed to months before deciding to instead move its headquarters to California.

The company is looking for someone to sublease floors 20 through 25 in 1144 Fifteenth for 10 to 15 years, paying $35 to $36 a square foot in addition to triple net expenses, according to a brochure.

The brochure estimates 2018 operating expenses of $16.15 a square foot, which would put the overall cost to a tenant above $50 per square foot per year.

Chipotle’s desired rent is slightly below what the remaining available office space in 1144 Fifteenth is being marketed at.

Chipotle’s headquarters operations are currently spread across two LoDo buildings at 1401 Wynkoop St. and 1515 Wynkoop St.

The company announced in December that it had signed a 15-year lease for the 20th through 24th floors — a total of 126,000 square feet — of the 40-story skyscraper at 1144 15th St., with options to expand. The cost of the lease was not disclosed. But at $35 psf/year, Chipotle would be paying about $4.5 million a year in rent.

JLL, which represented developer Hines in the lease, said Chipotle’s lease also included the 25th floor, with options to take over the 26th and 27th floors.

Excluding the portion that Chipotle is trying to sublease, about 82,000 square feet of office space in 1144 Fifteenth is still available. That includes the 26th, 27th and 37th floors, as well as a portion of the 32nd floor. Lease rates are in the $36-to-$40 range, according to JLL.

At the time Chipotle announced its 1144 Fifteenth lease, the company was led by CEO Steve Ells, who founded the company in Denver in 1993. In March, Ells was succeeded by Brian Nichol, formerly the top executive at Taco Bell.

In May, Chipotle announced plans to move its headquarters to Newport Beach, California. Taco Bell is based in nearby Irvine.

Chipotle also announced in May it plans to close its New York office.

In late June, Chipotle told the Colorado labor department that about 399 employees work at its Denver headquarters. The company separately told the New York labor department that the closure of its office there affects 32 employees.

Chipotle said the relocation will begin Oct. 5, and be completed by March 1, 2019.

In the June filing, the company said it expects to incur $70 million to $80 million in expenses related to the move, specifically “expenses related to employee relocation and transition costs, lease exit costs in connection with office leases in Denver and New York, and other transition activities.”

The brochure advertising Chipotle’s space at 1144 15 St. bills it as “shell condition space ready for build-out in Denver’s newest high-rise.” It says the space is available immediately, and that a tenant improvement allowance is available.

Savills Studley, which represented Chipotle in the original lease, is also representing it in the sublease process. The brokers listed on the brochure are Gregory Bante, Todd Roebken, Tyler Voell and Mara Andreano.

POSTED IN Commercial Real Estate, Top News

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