Expansive’s unraveling continues in the Denver area.
The Chicago-based coworking firm gave up ownership of its 115,000-square-foot building at 1630 Welton St. on Monday rather than face foreclosure, a company official confirmed.
And Expansive still owns two other area properties whose loans are in default.
Public records show the 1630 Welton St. property transferred via a 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 associated with that transaction.
Expansive bought the property in 2017, when the company operated as Novel Coworking. The firm financed the deal with a loan from Chicago’s Byline Bank.
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Expansive Chief Financial Officer Chris Klare told BusinessDen the company refinanced the property with a $12.3 million loan from RRA Capital in September 2022. That loan has been in default for the last six months or so for failing to make payments.
“Really it’s a classic office story — it’s overleveraged,” Klare said. “Both the lender and us were trying to find the best solution for everyone.”
A RRA executive declined to comment. But Klare said coworking tenants in the building won’t see any immediate change.
“Expansive is going to continue to manage it on behalf of the lender for the foreseeable future,” Klare said.
Expansive operates in more than 30 cities around the country, according to its website. The firm stands out from most coworking operators in that it generally owns its real estate.
But Denver has been a rough market for Expansive.
“We have a number of assets that are doing well, and we have a number of assets that are challenged,” Klare said. “Unfortunately, our Denver assets are generally challenged.”
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 dealfiled to foreclose on it. A receiver oversees the building, and Klare said Expansive ceased operating the space within it in April.
“They’re going to take a giant loss on that building. The question is when,” Klare said of the lender, LoanCore Capital.
Expansive is alsoin defaulton the loan for its building at 1495 Canyon Blvd. in Boulder. The lender there, Bellco Credit Union, filed a lawsuitin January, and had a receiver appointedin June.
One of Expansive’s local properties, however, is unscathed. The company also owns 8400 E. Crescent Parkway in Greenwood Village, where it operates in what had been a Regus facility.
Read more at our partner, BusinessDen.
Originally Published: July 3, 2024 at 3:00 p.m.
