One of Denver’s signature office towers is now a poster child for the Mile High City’s growing office crisis.

The 52-story Wells Fargo Center, known locally as "the cash register building," was recently reappraised at $115M — a 76% drop from its 2019 valuation, according to Bloomberg.

The more than 1M SF building backs a $277M single-asset CMBS deal, and the downgrade has already triggered partial interest payout cuts for holders of the top-rated tranche.

Bondholders that bought what was once rated a AAA bond now face roughly $22M in implied losses. Lower-tier notes are trading for pennies on the dollar, with some likely to be wiped out entirely if the building is sold.

Bloomberg’s analysis of regulatory filings shows that recent major bondholders included Fidelity Investments, Pacific Investment Management Co. and insurer Western & Southern Financial Group.

Brookfield bought into the tower in 2020 but defaulted and walked away in 2023. The building is now about 65% leased, down from 87% in 2019, as tenants such as WeWork have shed space.

Downtown Denver’s office vacancy rate currently sits at 36.8%, according to CBRE’s second-quarter office market report, up from 35.3% in Q1.

The collapse comes as Denver ranks sixth in the nation for CMBS office delinquencies, with a 27.2% delinquency rate — nearly triple the U.S. average — according to June data from Trepp. Several other downtown buildings have already slipped into receivership or foreclosure, including Industry RiNo Station, 700 Broadway and the World Trade Center complex.

Trepp Senior Research Manager Tom Taylor previously told Bisnow that many of these loans were made during the low-interest-rate boom and are now running into refinancing trouble as values reset.

Many loans are set to mature in 2026, Taylor said, raising the risk of further write-downs.