Bellco seeks foreclosure of coworking space in Boulder

BOULDER — Bellco Credit Union has filed a lawsuit to force foreclosure of a property in Boulder now used as a coworking space.

The credit union filed suit against 1495 Canyon Level Office LLC, a company listed as “noncompliant” with the Secretary of State. It lists a principal office of 318 W. Adams St., Suite 2000, in Chicago, which is also the address for Coworking Investors LLC and Expansive West Loop. The coworking space at 1495 Canyon is known as Expansive 15th & Canyon.

Expansive founder William Bennett did not return a call from BizWest seeking comment.

Bellco alleged in its court filing that Bennett and his company bought the 1495 Canyon property in 2018 and then took out a $7.5 million loan against it in 2019. Bennett personally guaranteed that loan.

The company and lender agreed to certain debt service coverage ratios and to a repayment schedule. Bellco alleged that the company and Bennett “engaged in actions and omissions that constitute events of default,” namely not making payments, not complying with loan covenants and failing to pay property taxes. The amount due is nearly $8.5 million.

Bellco seeks an award of damages, an order of foreclosure directing the sheriff to sell the property at public auction, interest, attorney fees and court costs.

Bennett’s company, which touts on its website that “in contrast to its competitors, Expansive owns its properties…,” was founded in 2012 with Chicago as its headquarters. It has 3.8 million square feet of workspace in 34 cities, with 45 locations total, according to the website.

Coworking, while a growing commercial real estate sector around the world, has faced headwinds in recent years, especially during and since the pandemic. National coworking company WeWork Inc. (NYSE: WE) filed for Chapter 11 bankruptcy protection last year with debts of $18.65 billion and assets of $15.06 billion. In its reorganization, it is attempting to shed leases, including one in Denver. The WeWork site in Boulder is not among those that the company seeks to abandon.

Industry information indicates that COVID-19 caused loss of 21.76% of coworking spaces. However, the industry projects that worldwide 5 million people will use coworking spaces by the end of this year, up from 2 million just a couple of years ago.

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