Coworking company gives up downtown Denver building rather than face foreclosure

Expansive’s unraveling continues in the Denver area.

The Chicago-based coworking company on Monday gave up ownership of its 115,000-square-foot building at 1630 Welton St. rather than face the threat of foreclosure, a company official confirmed.

And Expansive still owns two other properties in the area whose loans are in default.

Public records show that ownership of 1630 Welton St. was transferred via deed in lieu of foreclosure to 1630 Welton SPV LLC, an entity affiliated with Phoenix-based RRA Capital. The documents show a $6.88 million price tag on that transaction.

Expansive purchased the property in 2017, when the company was operating as Novel Coworking. The company financed the deal with a loan from Chicago’s Byline Bank.

Expansive Chief Financial Officer Chris Klare told BusinessDen that the company refinanced the property in September 2022 with a $12.3 million loan from RRA Capital. That loan has been in default for the past six months due to non-payment.

“It’s actually a classic office story: too much debt is being incurred,” says Klare. “Both the lender and we tried to find the best solution for everyone.”

An RRA executive declined to comment. But Klare said coworking tenants in the building won’t see any immediate change.

“Expansive will continue to manage it on behalf of the lender for the foreseeable future,” Klare said.

According to its website, Expansive operates in more than 30 cities across the country. The company differs from most coworking operators in that it generally owns its real estate.

But Denver was a rough market for Expansive.

“We have some assets that are doing well, and we have some assets that are being tested,” Klare said. “Unfortunately, our assets in Denver are generally stressed.”

In spring 2019, Expansive paid $40.2 million for the 17-story Trinity Place office tower at 1801 Broadway. In January, the lender that financed the deal filed for bankruptcy. A trustee oversees the building, and Klare said Expansive stopped operating the space inside it in April.