Colorado Real Estate Journal - September 16, 2015

Soma Capital Partners buys The Lab in third WeWork deal

The company that brought WeWork Cos. to The Lab, a newly completed office building at 2420 17th St. in Denver, has acquired the property.

Soma Capital Partners, in partnership with CenterSquare Investment Management, bought the 78,639-square-foot building from developers Brue Capital Partners and Confluent Development. The price was neither disclosed nor recorded.

WeWork, an international co-working platform, preleased 65 percent of the building and is expected to take occupancy by year-end. Soma Capital Partners previously completed deals with WeWork in Berkeley, California, and Toronto, Ontario, Canada, and led the company to Denver.

“We began talking to WeWork about Denver in late 2014 because we saw this as a natural fit for their expansion from gateway markets like New York and San Francisco,” said SCP partner Jordan Caspari. “The average WeWork member is 32 years old with a focus on work-life balance.

Denver is consistently ranked top in the country as a destination for millennials seeking refuge from big-city life, more affordable housing, 300 days of sunshine, world-class mountains and an international airport midway between New York and San Francisco. We believe that WeWork will be a tremendous success at The Lab given what Platte Street has to offer.” JR Bitzer of Lee & Associates began working with the buyer in December.

“Really The Lab was the only property that fit the parameters they were looking for,” he said.

Those included a location in or near Lower Downtown, River North or Denver Union Station, access to light rail and an environment that would appeal to WeWork’s millennial clientele.

The building wasn’t listed for sale, but Bitzer said the developers committed to make the transaction work. “I think WeWork is going to do incredibly well in that location and be an incredible attribute to the success and future development of Platte Street,” he said.

“WeWork immediately recognized Platte Street as on-brand and one of the more dynamic locations in all of Denver with its eclectic mix of stores and restaurants ideally situated in between the burgeoning Lower Highlands, Commons Park and the Union Station redevelopment,” said David Smith, a partner in SCP. “The prominent location on I-25 provides excellent visibility for the tenant. WeWork members already play on Platte Street and we believe the ability to office here will be very enticing.” Bitzer said WeWork’s space “will be very high-end, and it won’t look like your traditional build-out.” The WeWork lease has ignited interest in the remaining 25,000 sf of office space, according to Chris Phenicie of CBRE, who is marketing the office space.

“Having a dynamic and innovative group such as WeWork in The Lab has created significant interest from other users hoping to build off their energy,” said Phenicie. This interest hasn’t only been limited to technology tenants, as several traditional corporate users have also expressed interest in the project,” he said.

Urban Legend is marketing 3,000 sf of retail space on the ground floor to prospective food and beverage tenants. The building is next to the Denver Beer Co.