Sky, Slopes And Software: Tech Companies Take To Colorado's Mountain Towns
Tech companies coming to Colorado usually look to either Boulder or downtown Denver for their locations, even in today's uncertain office market. But as hybrid work persists and Front Range prices keep climbing, a few rural gems are raising their hands as potential alternatives for trendy employers.
Aided by improving internet connections and adjacency to the state's main draw, its quality of life via the Rocky Mountains, sparsely populated counties like Fremont and Chaffee are adding tech jobs, although it's just a trickle.
Employee wellness is one of the main reasons tech companies are looking for office space in more rural pockets of the state, according to Colorado Technology Association President and CEO Frannie Matthews.
Florence, in South Central Colorado, sits near the mouth of the Royal Gorge, one of Colorado's most popular attractions. And perhaps more importantly to the roughly 4,000 people who live there, the median home price is 42% lower than the $622K state average, according to Redfin.
Denver-based software company Pax8, which brings in about $1B in annual revenue, opened a regional office at the Emergent Campus in Florence in 2020.
The campus was originally built in 1920 and housed Florence middle and high schools until 2019, when it was converted into a live-work-play-style business innovation center with private offices and classrooms for students pursuing careers in tech, according to its website.
Information technology advocacy company Second-61 also has office space on the campus.
Fremont County, where Florence is located, has a high internet connectivity rate compared to other rural counties in Colorado, according to BroadbandNow. About 71% of people in Fremont County have access to the internet at speeds of 1 gigabit per second, compared to just 7.6% of internet users in nearby Park County.
To the northwest — but not far enough to hit pricey Aspen — is Chaffee County, which was named the Emerging Startup Community of the Year in 2022 by the Rockies Venture Club. The angel investing program recognized the county for its Central Mountain Ascent business accelerator program, according to a press release from the Chaffee County Economic Development Corp.
Three Chaffee County towns are home to emerging tech companies. Biotech company TopoGen operates in Buena Vista, while Salida and Poncha Springs are home to software companies Tracks Data Solutions and Adilas, respectively.
Each of these towns also offers a lower cost of living than the Denver metro area and easy access to outdoor attractions, along with decent WiFi speeds compared to other mountain areas.
“In Chaffee County, many successful business people that were born here, and many others who have chosen this as a place to live and invest, collectively want to see this place thrive,” Chaffee County EDC Executive Director Jake Rishavy said in the press release.
CTA's Matthews, who will step down from her position at the end of the year, said employers still need offices to inspire productivity and create a collaborative work environment, but the spaces also need to promote employee wellness to attract workers back to the buildings.
Those kinds of developments are happening in Colorado's urban environments as well. T3 RiNo in the River North Arts District includes a 5K SF fitness center. Steel House, also in RiNo, has a 13K SF urban park, and Arapahoe Square's 1900 Lawrence includes hospital-grade air filtration systems.
Remote and hybrid work has changed what kind of office space employees are willing to travel to, Matthews said.
“It's very hard to ideate and get that connection between complementary groups without an office setting,” she said. “Virtually, it can be done, and I think we'll get better at it. But there is absolutely a need for the office.”
But overall, the city's tech industry isn't what it was before the pandemic, a struggle the office market is still trying to navigate.
Before the pandemic, tech companies accounted for roughly 40% of office leases signed in the Denver metro area, according to CBRE Senior Vice President Ryan Link. However, that activity has declined to about 16% so far this year, Link said, which puts Denver roughly in line with national tech office leasing trends.
There are still impacts occurring from remote and hybrid work opportunities as well as economic challenges arising from high interest rates and stubborn inflation.
“It's not that these companies have gone away or disappeared. It's that they're being more thoughtful and a bit more strenuous about their office footprints,” Link said. “And that also means that it’s taking a little bit longer for some to make big-time decisions.”
While these emerging hubs are illustrative of the potential for Colorado’s tech industry, they also illustrate one of the market’s greatest weaknesses: The state most commonly attracts regional offices instead of headquarters, said Andy Cullen, managing broker at Tributary Real Estate in Denver.
Regional offices tend to be more susceptible to economic downturns because companies will essentially “roll up” their workforce to the main headquarters, Cullen said.
That means large local employers like Zoom and RingCentral, both of which are headquartered in California, could be willing to ditch their Denver offices to consolidate their workforce. There have also been companies that chose to downsize from a directly leased office to a coworking space because their workforce needs that level of flexibility, he said.
“These companies are catering to a talent pool that doesn't have to specifically be in any one place,” Cullen said.
Tech still accounts for about 20% of all office-using jobs in Denver, according to CBRE. Meanwhile, Denver is among the top three cities nationally for tech employment, up to roughly 102,000 as of the third quarter. That workforce represents just under 10% of the state’s total employment base but produces about 14.5% of the state’s gross domestic product, according to the Colorado Technology Association. But it remains to be seen how this industry growth will translate into demand for office space.
Going forward, Matthews said it will be important for policymakers to focus on improving technology education offerings in K-12 schools to help prevent Colorado workers from being poached to other states. The St. Vrain Valley School District, which serves Boulder County, has programs that help students participate in the digital economy, but school districts in smaller towns struggle to retain the teaching talent necessary to keep these programs going, Matthews said.
“Employers want people that are problem-solvers. They want people that are critical thinkers and who have good work ethic,” Matthews said. “That's really what we need to have education focusing on, what the learner needs in order to be successful in the community.”