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Western Union to Move its Global HQ to Denver Tech Center

September 5, 2016



Western Union to Move its Global HQ to Denver Tech Center

The Western Union Co. — Colorado's eighth-largest business by revenue — is moving its headquarters into a new 15-story building in the Denver Tech Center, just inside the Denver city limits, the Fortune 500 company confirmed today. The move will take the global money-transfer company (NYSE: WU) out of Douglas County and into a high-tech, highly visible building in Denver — something that the company hopes helps with brand recognition. It'll be the second Fortune 500 company to be headquartered in the City and County of Denver, along with health-care company DaVita Inc. "We just completed negotiations at One Belleview Station in the Denver Tech Center, near light rail and in a highly visible location. This modern facility will enable our company to strengthen and grow, while demonstrating our long-standing support for this great city," the company said today in a statement. Western Union will lease 246,500 square feet in One Belleview Station, at 7001 E. Belleview Ave. just west of Interstate 25. Prime West broke ground on the building in 2015. The building will bear the Western Union name, company spokesman Brad Jones said. Western Union joins Eide Bailly LLP, Prime West, Janiczek Wealth Management, Alacer Gold and TD Ameritrade in One Belleview Station's office space. Ruth's Chris Steak House inhabits the building's ground-floor retail. The building, which was developed by Prime West, includes 318,000 square feet and was the first large-scale speculative building to break ground in the Tech Center after the recession. It is now 100 percent leased. With the full lease-up of One Belleview Station, Prime West is now in the planning stages for another speculative building in the 42-acre Belleview Station mixed-use transit-oriented development.“Demand for transit-oriented Class A office is at an all-time high in southeast Denver,” said Ryan Stout, managing director at Cushman & Wakefield and one of the listing brokers for One Belleview Station. “There has been immense interest in One Belleview Station, leading Prime West and Gensler to put in motion plans for another 360,000 square foot spec office building, with 25,000 square feet of retail planned to deliver in 2020.” The move takes Western Union from landowner to renter. The company is offering for sale its current buildings, which were built in 1999 and 2002, of more than 391,000 square feet of office space in two buildings in the Meridian International Business Center, near E-470 and South Peoria Street. The two buildings, one at 12500 E. Belford Ave. and the other at 12510 E. Belford Ave., are listed, but a sale price is not suggested on the listings. Jones said he did not have information on the asking price. Western Union, which reported $837 million in net income in 2015, expects to move its 1,306 metro Denver-based employees into the new building in early 2018. The new space will be more visible, it has modern amenities and technology and its more centralized for employees and leadership who are visiting, Jones said. (Denver Business Journal)



Chinese Policy “Wall” Slows Investment Capital Bound for U.S. Assets


It may not be the Great Wall, but new policies put in place by the Chinese government are creating significant obstacles for Chinese investors to buy property in the United States. Chinese investment in U.S. property markets dropped 7 percent year-over-year to $5.4 billion in the first half of 2017, according to Real Capital Analytics (RCA), a New York City-based research firm. Some estimate that pullback to be even bigger. Depending on how Chinese investment activity is calculated across different sources, such as sovereign wealth funds, Chinese national companies and high-net-worth individuals, the decline in activity is anywhere from 40 to 80 percent compared to a year ago, estimates Spencer Levy, head of research, Americas and senior economic advisor at real estate services firm CBRE. The pullback started a year ago when the Chinese government began putting more stringent controls in place on the exit of Chinese capital from the country. The move to restrict outflows of capital to international investment was aimed at preserving currency value. Last week, the Chinese government issued a formal set of guidelines that further defines how those restrictions would be applied to different types of foreign investment. Essentially, the government put foreign investment into three different buckets. Those investments viewed as highly restrictive would include anything in the gaming industries. The second category of more moderate restriction would apply to property, film and sports investments. Those investments are not prohibited, but they will be looked at with a great degree of scrutiny. The third category is actively encouraged, and would include investments in infrastructure. “It is fair to say that you will see a weaker amount of Chinese capital flows for the short-term future until China gets more confidence in the strength of its currency,” says Levy. That being said, there is also some good news coming out of China in that capital flows have grown faster than some people have expected and shown more stability, he adds. “We’re seeing a little bit of a slowdown, especially on the bigger dollar side,” says Yuen Yung, CEO of Austin-based Casoro Capital, a real estate investment firm specializing in multifamily assets. About 15 to 20 percent of the equity for the firm’s investment funds comes from Chinese investors. Larger investors and high-profile deals tend to draw more scrutiny from the Chinese government. Smaller investors, with capital amounts ranging from $500,000 to $15 million, are also finding it more challenging to get money out of China. However, policies specific to the smaller investors have been in place longer. “So those investors have always had to be a little more resourceful in how they move dollars (legally) into U.S. real estate,” adds Yung. Another roadblock to Chinese investment in the U.S. is China’s new “One Belt, One Road” initiative that aims to reestablish the old Silk Road trade route with Europe, creating more connectivity and cooperation between China and Europe, notes Yung. “That could be another reason why there is a drop-off in dollars coming into the U.S.,” he says. Investors could be finding a much easier path in getting money out of China when they are investing in European real estate. “There are many factors that are slowing Chinese investment in the United States. Some are Chinese domestic factors. Some are U.S. domestic factors,” notes George Wu, a partner at Gelt Inc., a real estate investment company based in Tarzana, Calif. For example, Chinese investment jumped nearly 50 percent in 2016 with a record high volume of $33 billion, according to real estate services firm JLL. “Because investment in 2016 increased so fast from 2015, the investment amount is more likely to drop in 2017,” Wu says. In addition, there has been some “irrational investment,” with investors placing capital blindly or without sufficient due diligence. News of deals that ended up losing money may also be curbing appetite for additional acquisitions among some investors, adds Wu. Other factors that could change the landscape for Chinese investment in the U.S. include president Trump’s immigration policies, as well as potential disagreement between China and the U.S. on how to deal with North Korea, says Yung. “I actually think this is a more permanent shift, because it is an easier path for investors to invest capital in Europe as opposed to the U.S.,” he says. Even though inflows of Chinese capital are slowing, there are still plenty of examples of acquisitions and development deals moving forward. For example, Chinese development firm Greenland USA still has two major development projects underway, with Metropolis in Downtown Los Angeles and Pacific Park in Brooklyn. “I certainly hope that Chinese capital comes back,” says Levy. However, even at the peak, Chinese investors represented about 5 percent of the overall buyer pool in the U.S., he notes (though China was the number one source of foreign investment in U.S. properties over the past 12 months, with a total value of $16.5 billion, according to RCA data). “So while you never want to see a large player stand on the sidelines, because that will put more upward pressure on cap rates, I think there will be plenty of other domestic and foreign capital to fill the void,” he adds. (National Real Estate Investor/Beth Mattson-Teig)



A New HQ for HomeAdvisor: HUB Breaks Ground in RiNo

The HUB, a 275,00-square-foot mixed-use development at 3601 Walnut St. in Denver's River North area, broke ground Wednesday after a year of speculation about the project. Tech firm HomeAdvisor will take up 70,000 square feet of office space in the HUB, relocating its headquarters from Lakewood. The firm plans to move 350 employees there. HomeAdvisor first announced the relocation last July but earlier this year told the Business Journal that it was considering other sites after delays with the HUB project. But in April, Beacon Capital Partners, the Boston-based owner of such Denver legacy properties as the Wells Fargo Center at 1700 Broadway and Civic Center Plaza, purchased the HUB site for $19.37 million from Elevation Group LLC. The sale catalyzed the project once again, leading to its groundbreaking.“We believe in the power of RiNo,” said Cathy Mossman, managing director at Beacon Capital Partners. “This is where creative and innovative companies want to be, and the HUB will offer some of the most sought-after amenities in the area.” Elevation Development Group is still the co-developer on the project, along with Beacon. The HUB was designed by Gensler and will be built by Mortenson Construction. Jones Lang LaSalle and The Zall Group are working to lease the remaining space in the development. In total, the project will include 250,000 square feet of office space and 25,000 square feet of retail. The HUB is located near the 38th and Blake light rail station along the A Line.“The HUB is the exact type of addition we need in RiNo and along our FastTracks corridor,” said Denver Mayor Michael Hancock, who was present for the groundbreaking. “We had a vision for this site that it would become the model of TOD development in Denver. What’s most exciting is this center of innovation and job creation.” (Denver Business Journal)