Davita Announces Location Near Union Station

(Artist rendering of proposed Davita Headquarters, Downloaded from DenverInfill blog, Courtesy of Davita Inc./Moma Architecture)


Davita, the Fortune 500 kidney care company that is relocating its corporate headquarters to Denver, selected a site at 2000 16th street, near Union Station for its new building. The 14 story 270,000 square foot building is expected to cost around $100 million to develop and will initially house an estimated 450 employees. The relocation of a new corporate headquarters to Denver, near Union Station, is great news during the current economic environment for a number of reasons.

1. It will bring much needed short term construction and long term corporate jobs to the region.



2. It is a vote of confidence in the Union Station redevelopment efforts, boosting the property tax revenues in the district and helping to ensure repayment of the tax increment financing (TIF) bonds used to fund the redevelopment.



3. The location near the FasTracks public transportation hub is great example of sustainable, green, dense, infill growth.



4. Its a boost for downtown Denver which is reeling from the recent loss of notable headquarters such as Qwest.



5. Fortune 500 relocations are rare and have been hard to achieve particularly in Denver and bring prestige and professional services jobs with them (local finance, accounting, consulting, and business services companies get a boost). Davita also plans to house its corporate training hub in this facility so it will bring thousands of business travelers into downtown Denver each year.



6. Davita's choice to be an owner-occupier of their building instead of a lessee in a multi-tenant office tower, increases the probability that the building will be an architecturally distinctive signature tower. Compared to speculative developers, owner-occupiers tend to spend more on architecture and design, seeing their building's as embodiments of corporate character instead of just trying to maximize the cash flows of their assets.

This development along with the decision by IMA Financial Group to locate its headquarters in one of the Union Station "wing" buildings, clearly shows the powerful gravitational pull of FasTracks. According to the Denver Post quoting, Davita CEO Kent Thiry, on the location decision:

"It's going to be great for our teammates," Thiry said. "The fact that there's so many forms of mass transit, the fact that there will be a huge variety of places where people can live conveniently and the fact that there will be such easy access to restaurants, shopping, entertainment, all while being in a green environment is sort of a rare combination."

The Davita announcement is great news for economic activity in all of downtown Denver. However, I am also thinking that this is the beginning of a trend where the classic 17th street office corridor in downtown Denver, nicknamed "the Wall Street of the Rockies," could struggle to retain tenants and lease space while Union Station and Lower Downtown thrives. 17th Street landlords and property owners must be strategizing about how they can "pick up their game" with increased amenities and attractions or suffer a relative decline in their fortunes.