The growth of Colorado companies operating in space is driving an increasing need for space on the ground to support operations taking place hundreds of miles above the earth.
Colorado is the second largest aerospace industry after California, and real estate agents are working with companies looking for new buildings to make room as they continue to expand.
“There’s a lot happening in aerospace and it’s not going to stop,” said Matt Harbert, vice president at Raise Commercial Real Estate.
According to an analysis by Raise, approximately 23% of Harbert’s current work involves the aerospace industry. Colorado has been home to some of the larger, well-known aerospace companies for some time, but Harbert said “the startup ecosystem” is driving the industry’s expansion in the state.
“We see an incredible number of startups that we hadn’t seen five or seven years ago. They either start here or move here from California,” said Harbert.
At least three aerospace companies have recently moved into new premises of 100,000 square feet and larger, Harbert said.
According to a report by the Metro Denver Economic Development Corporation and the Colorado Space Coalition, Colorado has 290 aerospace companies and more than 500 companies that provide space-related products and services. The analysis states that employment in this sector grew by 11.2% from 2019-2020 in the Denver nine-county area and northern Colorado, and by 30.1% from 2015-2020.
According to the report, Colorado has the highest concentration of private aerospace employees in the nation. In 2020, 33,460 people were directly employed in the aerospace industry. Metro Denver’s EDC analysis states that 62,270 private and military aerospace workers support an additional 170,340 workers in industries across the state, directly and indirectly employing 232,610 workers.
The industry’s “hypergrowth” in recent years began around the start of the coronavirus pandemic, said Frederic de Loizaga, first vice president of Denver-based commercial real estate services and investment firm CBRE.
“Aerospace has been one of the bright spots throughout the Denver metro area and all the way down to Colorado Springs,” said de Loizaga. “From a real estate perspective, it’s great to have the industry here. We as a state are very fortunate to have the concentration of aerospace companies that we have.”
Colorado’s aerospace sector has been anchored by several large companies such as Ball Aerospace. Lockheed Martin Space, Northrop Grumman, Raytheon, Sierra Space and United Launch Alliance.
“When you have all these big players, you also attract the smaller aerospace users who want to be in close proximity to the bigger players,” said de Loizaga, who specializes in working with industry.
According to Herbert, Colorado benefits from having a strong presence in both private and defense aviation. “These companies want to be together for the common piece. They want to be close to the startups and bigger names that we have.”
Colorado’s strong space economy has been a boon to York Space Systems, which was founded in Denver in 2012. Dirk Wallinger, CEO and President, said the company is able to draw on the “tremendous amount of talent and skill” in the state.
“We’ve also brought a lot of people into the state because it’s just a great place,” Wallinger said.
York Space, which makes small satellites for government and residential customers, recently moved into a 13,000-square-foot building at the Denver Tech Center. The Company has three other facilities in downtown Denver totaling approximately 50,000 square feet. One of these is a research and development site in the Aerospace and Engineering Sciences Building at the Metropolitan State University of Denver.
Wallinger declined to give details, but said York’s workforce has grown 300% year over year over the past three years and revenue has grown 250% year over year. The company aims to be able to produce 750 satellites per year by the end of 2023 or sooner.
There are many types of buildings that aerospace companies need, Harbert said. “The unique thing about aerospace is that it typically requires both manufacturing and industrial buildings and offices,” he said.
This usually requires a building with high ceilings. One option is to add a mezzanine for the office space.
De Loizaga said some companies need “clean rooms,” or a controlled environment to keep dust and other particles out of a production area. Secure areas are often required to protect work on defense and national security projects.
The real estate industry is seeing aerospace companies moving to new parts of the Denver and Colorado area.
“Most of the activity took place between Colorado Springs and Denver. That really was the corridor for aerospace,” said Harbert. “Now we’re beginning to see that the corridor continues to Boulder. We’ve seen a lot more activity along the US 36 corridor.”