Angi Reduces RiNo Office Lease By 33% As Submarket’s Recovery Struggles
Home services behemoth Angi recently reduced its office space in Denver by about 33% as the River North office submarket continues to lag behind the citywide recovery.
The company told the Denver Business Journal that it moved out of one of the three floors it leases in The Hub, a 275K SF mixed-use and transit-oriented office building, at 3601 Walnut St. Overall, Angi reduced its office space by about 50K SF, but still leases more than 100K SF on the seventh and eighth floors of the building, the DBJ reported. Angi has leased the space since 2019.
The DBJ reported one reason why Angi decided to reduce its presence in River North is the company is revising its hybrid work policy, which requires employees live within 30 miles of an Angi office and work from the office two days per week. In October, that plan is expected to change and require employees to work in the office three days per week between Tuesday and Thursday.
Angi’s sales teams in Denver, New York and Indianapolis work from the office five days per week, the DBJ reported.
"We are high-level committed to Denver,” Angi Chief People Officer Mike Wanderer told the Denver Business Journal. “We've been in Denver a long time, particularly, obviously the HomeAdvisor business has been based there. We love being there.”
Angi’s reduction of space in the River North market is indicative of that area’s struggles to retain office tenants. According to CBRE’s Q2 office report, RiNo has the highest direct vacancy rate in Denver at almost 34%. The submarket with the next highest vacancy rate is downtown, which has a 28% vacancy rate, according to the report.
It is important to note that because RiNo’s office market is relatively small with just over 2M SF of inventory compared to office hubs like downtown Denver, which has more than 30.6M SF of inventory. This small inventory makes smaller shifts like Angi’s space reduction seem more significant on a market level.
RiNo’s high vacancy rate also comes amid a flurry of development activity for Class-A office space in the area. For example, Mortenson Construction broke ground on its new 65K SF office building in River North while other office projects like T3 RiNo, a 230K SF mass timber office project, and Steel House, a 290K SF office building, remain ongoing.
CBRE found that River North has the highest asking rents in Denver at more than $49 per SF. That is more than $7 per SF greater than office spaces in downtown and nearly $10 per SF greater than office space in Cherry Creek, CBRE data shows.
Denver’s high average rent for office space may also be one factor that is preventing some new office projects from seeing meaningful pre-leasing activity. For instance, CBRE found that both T3 RiNo and Steel House are 0% pre-leased, as of July 12. On the other hand, office developments like The Current and Paradigm River North are 20.7% and 38.4% pre-leased, respectively, CBRE found.
“Even as landlords in the market begin to run afoul with lenders and face the impact of lower valuations, there has yet to be a meaningful decrease in rents across the overall market,” CBRE’s report concluded.
