A RiNo tech company signed the second lease at a new Platte Street office building whose inaugural tenant wants to bail.
Velocity Global has leased 17,530 square feet of office space in the One Platte building at 1701 Platte St., according to the brokerage that represented the building’s developers.
CEO Ben Wright, who founded Velocity Global in 2014 and said the company would have revenue of more than $200 million in 2022, said the space is on the second floor.
Denver-based Nichols Partnership and San Francisco-based Shorenstein Properties completed the five-story One Platte building in April.
Before completion, stocking-trading app Robinhood leased 120,000 square feet across the two top floors of One Platte. But the company, which didn’t respond to a request for comment, has never moved in, and its space is now being marketed for sublease.
Velocity Global sells cloud-based software that helps companies manage their workforce and makes hiring employees worldwide easier. Wright said customers include Southwest Airlines, the manufacturer Foxconn and tech giants Google and Facebook.
The company currently has its headquarters in the RiNo Industry Station coworking space.
“We’ve been in Industry basically for our whole existence,” Wright said.
Wright said RiNo has been “fantastic” for the company. But Velocity Global has been looking for an opportunity to get closer to downtown, he said, because it offers more amenities and the transportation hub that is Union Station.
Velocity Global didn’t raise any outside capital until the spring of 2021 when it raised $100 million from a single private equity firm, FFL Partners. It raised another $400 million this past spring from two different investors.
The latter round gave the company a “multi-billion” dollar valuation, Wright said, declining to specify further.
Wright said the company has been profitable every year since it launched, although it will lose money in 2022 before resuming profitability next year.
“That is the thing that really interested our investors,” he said of profitability.
Wright said he was inspired to start Velocity Global when, in a previous job, he was explaining to the chief financial officer of a Colorado company what it would take for that firm to employ a person in Saudi Arabia. The executive was shocked at the answer — that it would take $25,000 and four months to set up a legal entity in that country and $50,000 a year to maintain it.
“And he said, you guys do business in Saudi Arabia, why don’t you just employ this person for me?” Wright said.
Wright said the company’s “rocket-ship expansion” accelerated thanks to the pandemic, which has prompted more companies to embrace remote employees. Competitors include San Francisco-based Deel and an Israeli firm called Papaya.
Wright said Velocity Global employs 850 people in 55 countries. And although the company will now have a sleek new Denver headquarters, there’s no plan to require employees to come in.
“It’s a landing spot for people to come,” Wright said, adding he generally goes in one or two days a week.
Nichols Partnership Development Director Melissa Rummel said it’s been a “very, very rough year” for office leasing, although that’s a market-wide phenomenon.
“We really thought things were going to pick up,” she said. “We expected it to have a lot more activity than it did.”
Rummel said the sublease decision by Robinhood, which has laid off staff and seen its stock price fall 53 percent so far this year, is “just part of the market turmoil.”
Rummel said Nichols is building out the remainder of One Platte’s second floor as a spec suite, which will be completed in May, and holding out hope that tenants will be more willing to make long-term office decisions in 2023.
“Our building is best in class, and there’s a flight to quality for sure,” she said.
And there could be more committed tenants soon. Rummel stwo draft leases are alsoases out for the building’s ground-floor retail space.
“We are having good retail activity,” Rummel said.
Newmark brokers Jamie Gard, Jeffrey Castleton and Caroline Nowack are marketing One Platte.