Classified Coworking: Denver's Aerospace Market Attracting New Spin On SCIFs

Denver’s hot aerospace market is fueling the growth of a coworking-esque model for shared sensitive compartmented information facilities, or SCIFs — spaces many military and defense contractors need to view sensitive information. 

The new model has come to be known as classified spaces as a service, or CSaaS, and refers to a government-certified office building where multiple tenants can store, discuss or electronically process classified information.

Although the exact number of projects underway in Denver is unknown, experts say CSaaS is becoming increasingly popular as Colorado aerospace companies like Northrup Grumman, Lockheed Martin and Raytheon are looking to expand, but developers struggle to keep up with the demand.  

“In the past, there have probably been companies that had excess SCIF space that then compartmentalized it for other highly sensitive users, but over the last 24 months, it’s really become more of a business model than I have ever seen,” CBRE Senior Vice President Frederic de Loizaga told Bisnow. 

One of the first signs of life for the emerging CSaaS industry in Colorado came when a company called Westway Enterprises, a company founded in 2008 and headquartered in San Marcos, Texas, began renovating an 86K SF building in Aurora into a CSaaS space. 

Donna McCarty, Westway’s vice president of client services, told Bisnow that Westway caters to the intelligence community and defense contractors and offers a “WeWork-type facility” for classified spaces.

Some of the amenities Westway will include in the Aurora facility are 24-hour monitoring, shared meeting spaces and lounge areas. The building is expected to be completed in the first quarter, and the accreditation process could be completed as soon as 30 days afterward, McCarty said. 

“If people open their minds to this new WeWork type of avenue, SCIF as a service, then they’ll see there's a lot of growing here, and there's a lot of things that can come out of the market, when people can integrate and get to know each other,” McCarty said. 

California-based CSaaS company Nooks entered the Colorado market in April 2023 with a 60K SF space near the University of Colorado, Colorado Springs campus. The company was founded by national security veterans and is the only company licensed by the federal government to provide spaces where “collaboration or segregation” of classified materials can occur simultaneously, according to a press release.

Some local developers like Koelbel & Co. have also gotten into the CSaaS game. Koelbel is building a 200K SF, four-story building near Buckley Air Force Base in Aurora known as Innovus, which will be a fully accredited, Intelligence Community Directive 705-compliant shared office space once it is completed in Q3 2025, according to its website. ICD 705 refers to the standards for SCIF spaces that are set by the director of national intelligence. The building will also include personnel security, cybersecurity, and primary and secondary fiber optic communications. 

Colorado’s CSaaS market is also growing as large firms like Northrup Grumman and Lockheed Martin make up roughly 53% of the 2.6M SF aerospace companies are leasing in the Denver metro area, according to JLL’s Q1 Denver aerospace market report. 

During Bisnow’s Colorado State of Aerospace event on Tuesday at the Lone Tree Arts Center, experts described this activity as a double-edged sword. On one hand, it is a sign of a growing industry that supports roughly 37,000 jobs per year and contributes $12.7B to Colorado’s economy, according to data from the Metro Denver Economic Development Corp. On the other hand, the activity has made it harder for both large and small aerospace companies to expand. 

John Howard, co-founder and chief technology officer of Canopy Aerospace, an advanced manufacturing and high-temperature materials company headquartered in Littleton, said his company had two buildings bought out from underneath it during the letter of intent stage. He took it as evidence that Denver’s aerospace market is growing rapidly. 

GE Johnson Senior Manager Autymn Rubal added that supply chain delays for parts like SCIF doors and switchgears make it unattractive for developers to renovate or upgrade their spaces. The overall cost of the projects can vary widely depending on their location. Rubal said one project in Texas penciled out at around $300 per SF while another one in California came in closer to $575 per SF.

“There are some creative ways around it, but it takes collaboration,” Rubal added.