WeWork is reducing the size of its location at Denver’s Wells Fargo Center, dealing a blow to the already-struggling office tower.
The New York-based coworking firm is vacating three of its five floors in the 52-story office tower at 1700 Lincoln St., a WeWork spokeswoman said. Members working there are being relocated.
A separate source outside WeWork told BusinessDen the company has reached a deal with building owner Brookfield to terminate its lease for the three floors, but that the deal still needs to be approved by the special servicer that oversees the building because of Brookfield’s loan default. Brookfield declined to comment.
Floor plates at the Wells Fargo Center are approximately 25,000 square feet, meaning WeWork’s decision leaves the building with another 75,000 square feet of unoccupied space.
The deal is the second recent contraction of WeWork’s local footprint. The company shuttered its location in The Lab building along Platte Street weeks ago, leaving five WeWork locations in Denver and one in Boulder. WeWork’s stock has dropped 80 percent this year, giving a company once valued by investors at $47 billion a market cap of under $600 million.
The 1.2-million-square-foot Wells Fargo Center, whose top resembles a cash register, is Denver’s third-tallest building. The $277 million loan secured by the building has been in special servicing since late last year when Brookfield failed to pay it off upon maturation.
The Wells Fargo Center was valued at $287 million as of June, according to Trepp, a firm that tracks commercial real estate loans. That’s down from $475 million in 2019.
Brookfield also owns Republic Plaza, whose loan was also in special servicing for months. The company said this month it had reached an extension deal with its lender on that building to exit default.