For Immediate Release: 10/27/2015 8:24 am
Worcester, MA (October 26, 2015) - Front Street JV, LLC, a joint venture of Franklin Realty Advisors LLC and Great Point Investors LLC, the City of Worcester and UMass Memorial Health Care are pleased to introduce a major redevelopment project in Worcester, Massachusetts. The project represents the premier office and mixed-use properties in the heart of the downtown.
"We are excited to undertake this ambitious project that will further the ongoing revitalization of Worcester's important downtown area," said Charles "Chip" Norton, manager and owner of Wellesley-based Franklin Realty Advisors LLC. "This project continues our work in, and commitment to, this city and the vision for its future. We have a longstanding and proven development record in the City of Worcester and look forward to this exciting next phase."
The project encompasses the redevelopment of two office towers at 100 and 120 Front Street, three commercial/retail opportunities at 90/110 Front Street and 2 Mercantile Street and a 1,647-space structured parking garage. The non-parking properties total 636,000 square feet of space, including at acquisition approximately 200,000 square feet of vacant space for redevelopment as office and retail.
The redevelopment project will include $36 million in upgrades and the economic benefits to Worcester have the potential to generate hundreds of new permanent, full-time jobs in addition to the existing 1,250 that currently work on site. In conjunction with the acquisition, UMass Memorial Health Care has signed a lease agreement for 74,600 square feet of space, which will be home to approximately 500 employees by end of year 2017. Additionally, UMass Memorial Health Care will begin use of another 20,000 square feet at 90-110 Front Street as a training center before the end of this year.
"As the City's largest employer, it is only right that UMass Memorial Health Care is a catalyst in this exciting new redevelopment in downtown Worcester," said Eric W. Dickson, MD, president and CEO of UMass Memorial Health Care. "We had several options for a new office space to house our 500-person IT department, but made a conscious decision to be a part of this because we believe in this city and fully support city leaders' work to improve and enhance the downtown area. I am proud to reaffirm our commitment to this city and our patients in furtherance of our mission as the leading health care system in the region."
The total projected cost is $70.1 million between property acquisition and redevelopment. Equity will be provided by Great Point Investors LLC of Boston as investment manager of the Combined Funds of the New England Carpenters as well as Franklin Realty Advisors whose primary investors are Worcester based. Debt financing of $46 million is being provided by Wells Fargo Bank, N.A. and Fidelity Bank of Worcester.
"We see great established value and growth potential in these properties with their superb location and access for existing and future tenants," said Gary Schwandt, principal of Great Point Investors LLC. "The extensive renovations will create world-class office and retail spaces to meet the growing demand in Central Massachusetts."
Mr. Schwandt added that the opportunity to bring capital from the Pension and Annuity Funds of the New England Carpenters is especially exciting as those funds represent the retirement benefits for 18,000 retired and actively working carpenters and their families throughout New England.
Franklin Realty Advisors and its capital partners have completed the property acquisition and will commence the regulatory approval and development process. Installation of a new facade and renovation of space for UMass Memorial is planned for September 2016 completion.
"With the development on Front and Center Streets we will see tens of millions of new investment dollars being concentrated in our downtown," said Worcester Mayor Joseph M. Petty. "I want to applaud the developers for seeing this opportunity through and for the institutional support from UMass Memorial Health Care. This is new money and a new project that will create hundreds of new jobs in our City."
This redevelopment will be at the epicenter of Worcester's current downtown resurgence and a key piece of CitySquare, a $565 million multi-phased, public-private project in the heart of the City. CitySquare is the largest redevelopment project in the Commonwealth outside the City of Boston. This new project's world-class amenities and innovative redesign will enhance the vibrant and welcoming atmosphere for existing and future tenants, shoppers and visitors.
"This project will bring hundreds of new high-quality jobs and tens of millions in private dollars downtown. It is especially exciting because it is market-driven; smart people are making a huge bet on downtown Worcester, and with good reason. Between the continued progress of CitySquare and the $7 million in upgrades the City has made to the Worcester Common and surrounding streets and sidewalks, downtown is poised for big things," said City Manager Edward M. Augustus, Jr. "I want to thank Chip Norton, Franklin Realty Advisors, Great Point Investors and UMass Memorial Health Care for their commitment and vision, and I look forward to continuing to work with them, our partners at CitySquare and others to keep the future bright in downtown Worcester."
"The announcement of this major downtown development project is exciting and transformative. This continues our incredible momentum towards a new downtown, where students, residents and visitors can work, study, live and play in an 18-hour environment," said Craig L. Blais, president and CEO of the Worcester Business Development Corporation. "We finally have these key properties in the hands of a proven, cooperative and committed property owner in Franklin Realty Advisors who share in our vision for a revitalized urban center. We at the WBDC look forward to working with Chip Norton and his entire team on this exciting project in downtown Worcester."
About Franklin Realty Advisors LLC
Franklin Realty Advisors LLC is a regional real estate development and advisory firm headquartered in Wellesley, Massachusetts with specific expertise in public/private partnerships and historic preservation projects. Over the past 18 years the managing directors and senior management of the firm and its affiliates have developed, acquired and/or managed more than $1.5 billion of real estate projects throughout the United States, including more than $200 million in office and mixed-use projects in Central Massachusetts. Significant local projects include the $100 million Southbridge Business Center, One and Two Chestnut Place in Worcester, The Worcester Business Center and 300 Grove Street.
About Great Point Investors, LLC
Great Point Investors LLC of Boston, Massachusetts is a national investor, primarily in industrial and office properties. Great Point Investors' clients include separate accounts for large pension and endowment clients. Since the firm's founding in 1998, Great Point Investors LLC has made over 120 purchase and sale transactions in over 30 different markets in the United States.