TIAA, one of the nation’s largest financial firms, informed its employees Tuesday morning that it is closing its Denver operations center over the next two years, putting about 1,000 jobs at risk.
“We are confident that these decisions are right for the future of TIAA. Our goal is to ensure that our locations best serve our clients, provides strong real estate investments, are cost-efficient, and inspire associates to do their best work,” TIAA’s Chief People Officer Claire Borelli and Chief Administrative Officer Derek Ferguson wrote employees in a letter.
TIAA will close its Jacksonville, Fla., office in July 2025 and its Denver center, 1670 Broadway, in July 2026. A data center in Broomfield, 11525 Main St., will remain open, but limited to “only roles that are critical to data center operations,” the letter said. About two dozen workers are employed there.
Denver became an important player in the money management and mutual fund industry decades ago, which helped it become a hub for financial service jobs, drawing in firms like TIAA, Charles Schwab & Co., Fidelity Investments and TransAmerica.
After years of steady growth, the number of financial service jobs statewide is at 2021 levels, according to the U.S. Bureau of Labor Statistics. TIAA’s relocation is especially painful for downtown, hard hit by the shift to remote work during the pandemic and struggling with an office vacancy rate above 30%.
“We are obviously incredibly unfortunate to lose such an anchor tenant like TIAA. They have been a fantastic partner in the community for many, many years,” said Kourtny Garrett, CEO of the Downtown Denver Partnership.
Located in the former Amoco building, TIAA was so dominant at 1670 Broadway that the location became known as the TIAA building. The Denver lease wasn’t set to expire until 2029.
TIAA’s Denver-area customer service representatives who deal face-to-face with local clients will be retained locally at the firm, which manages $1.3 trillion in assets on behalf of 4.7 million individuals and more than 12,000 institutional clients, mostly universities and nonprofits.
Most of the Denver positions will relocate to Frisco, and Denver employees will be offered the chance to move there, the company said. Decisions on what specific positions will move and any severance for those not relocating will be made as the closing date approaches.
“Closing TIAA’s Denver office in 2026, instead of when the lease ends in 2029, will provide substantial savings in rent and operational costs – savings which TIAA can then invest in business needs and serve the best interests of clients. We made this announcement now to give our associates as much notice as we could,” Borelli and Ferguson said in an emailed statement.
The Jacksonville office primarily supported TIAA Bank, which TIAA sold in 2023, and the closure there is tied to the expiration of the building lease next summer. But Denver is a different story. In 2016, TIAA expanded its space in Denver to accommodate new hires, beyond the 1,400 it had at the time, and called the city “critical” to its growth plans.
In 2022, TIAA said it was building an office tower in a booming stretch of Frisco, Texas, with the assistance of $18 million in incentives from the state.
“We believe Frisco is the right market to invest in and grow in,” Borelli and Ferguson said, citing its lower costs, the opportunity for a stronger workplace culture in a newer building and leveraging a “strong and broad talent pool in a geographic area that is growing and thriving.”
TIAA will maintain its corporate centers in New York, Chicago and Charlotte, N.C., with Frisco replacing Denver.
Borelli and Ferguson told employees that the Frisco area is establishing itself as a hub for the financial services industry and tech companies and outscored all other areas for available talent, quality of life, population diversity and economic incentives.
TIAA is a majority investor in and asset manager of the Frisco tower that it co-developed with Nuveen Real Estate. The campus will be “state-of-the-art” and supportive of the company’s net-zero carbon emissions goals.
J.J. Ament, president and CEO of the Denver Metro Chamber of Commerce, said TIAA’s decision is a reminder that policy choices impact competitiveness and coasting on past successes isn’t a winning strategy.
“This is a call to action to build a more business-friendly environment, lower the costs and complexity of doing business, and maybe most importantly, lower the cost of living for employees – especially by building more and more affordable housing throughout the metro Denver region,” he said.
Garrett, formerly the president of Downtown Dallas Inc., pointed to Texas’ pro-business reputation with low regulation and a lower cost of living. That has recently attracted several companies to relocate their operations to the Lone Star State. Elon Musk last month announced he was moving SpaceX from California to Texas, after doing the same with electric carmaker Tesla’s office in 2021. Last week, Chevron Corp. announced that it was moving its headquarters from California to Houston.
But Denver is making bold investments that should pay off, including $150 million to renovate the 16th Street Mall and an expanded Downtown Development Authority, which could pump $500 million into the area over the next 10 years, and much more through private investments.
“At this moment in time, we need to level up,” she said.
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Originally Published: August 6, 2024 at 11:37 a.m.
