Before the onset of Covid-19, Worcester roared with commercial real estate activity, attracting developers from coast to coast. Los Angeles-based Benedict Canyon Equities bought the 24-story Sky Mark Tower apartment building for $28.8 million. Boston-based Synergy Investments jumped in the Worcester market with the $16.5 million purchase of Worcester Plaza at 446 Main St. And Madison Properties in Boston began development of the former Wyman Gordan industrial land, adjacent to Polar Park, the $115 million ballpark off Madison Street for the Worcester Red Sox. This multi-use project will feature a new Class A office building just beyond the ballpark’s left field. In addition, two hotels, 250 apartments and 65,000 square feet of retail space are in the works.
These exciting developments and others were influenced by a growing perception about Worcester and its potential to become an 18-hour city where young professionals can live, visit and work.
Living in Downtown Worcester
No organization deserves more credit for jump starting the renaissance of downtown living than the Massachusetts College of Pharmacy and Health Services (MCPHS). Last year, the university purchased a downtown micro-lofts building at 379 Main Street, adding to its urban campus and land holdings, consisting of 18 properties downtown and 549 beds for students.
The Grid properties on Franklin and Portland streets developed by Boston-based MG2 Group has also proved crucial in improving livability in downtown Worcester. Today, the dozens of properties in the MG2 Group portfolio comprise almost 475 residential units and 45,000 square feet of retail space, including The Beer Garden, Brew on the Grid, and Craft Table & Bar. According to staff at The Grid, they’ve seen an immense transformation in the downtown’s demographics, becoming much more hip, young and energetic.
The city’s downtown has seen the addition of hundreds of other new apartments over the past couple of years, attracting college students and young professionals to live downtown. At 145 Front Street, more than 99% of its 365 luxury apartments were occupied inside a year of marketing by New Jersey-based Mack-Cali Realty Corp., the parent company of developer Roseland Residential Trust. The apartment complex also includes a Fidelity Bank branch, Protein House restaurant and Elizabeth Grady salon.
At 332 Main Street, the newly renovated 7-story Central Building with 55 apartments is 100% occupied after a $26 million renovation by local developer, Katie Krock. And, just down the street, the former Worcester County Courthouse is being developed by Trinity Financial of Boston into a $54 million apartment complex. Of the 117 apartments, 64 will be affordable for income-eligible tenants with rents ranging from $800 to $1,800 for the studio, one-, two- and three-bedroom units. The other 53 apartments will be priced at market rate ranging from $1,700 to $2,900.
Worcester Arts, Entertainment & Dining
The Hanover Theatre is expanding its footprint with a new pedestrian plaza outside its front door including outdoor seating and decorative lighting. Additionally, The Hanover Theatre welcomed to the theatre arts district in May the Jean McDonough Arts Center (JMAC), including the BrickBox Theater and the Worcester PopUp arts space. The nearly 303-seat theater will create space suited for professional plays, music, and dance. The PopUp space will be used by various groups of artists free of charge.
Across the Common in City Square, two high end restaurants are due to open shortly: Ruth’s Chris Steakhouse and Boston-based Broadway Hospitality Group (restaurants include Tavern in the Square, The Broadway, and Tavvitas)
Nearby, in the Canal District, the 20,000 square-foot Worcester Public Market opened to great acclaim in January with 35 food and retail vendors and anchored by Wachusett Brewing of Westminster. Above the market, there are 48 live-work lofts that are fully occupied with rents ranging from $1400 a month for a studio to more than $2200 a month for a two bedroom unit.
Boston-Satellite Offices Opening in Worcester
Worcester becoming an 18-hour city is critical for companies to recruit and retain its workforce. Being able to have great restaurant options at lunch break, and apartments within walking distance is essential.
In the past year, several Boston companies chose to open satellite offices in Worcester, including accounting and consulting firm, Blum Shapiro; engineering and consulting firm Tighe & Bond; and, land surveyors Feldman. Due to open later this summer is public broadcasting media organization WGBH, who will be opening a news bureau at the former location of the Worcester Telegram & Gazette at 27 Federal Street.
Worcester: Emerging From Pandemic
As Massachusetts begins to open post Covid-19, Worcester Is poised to accelerate its growth momentum in a variety of commercial real estate sectors:
- Life Sciences: The Worcester Business Development Corporation’s biomanufacturing campus, The Reactory, just inked WuXi Biologics to its first land parcel deal. WuXi will be building a $60 million, 107,000 square foot production facility due to be operation in 2022 and will create 150 new jobs. More transactions are expected this summer.
- Distribution / Warehouse: With its headquarters in Boston and Hartford, Eversource Energy is developing the former FedEx distribution facility in Auburn to be its new centrally located training and fleet maintenance facilities. With its central location accessible to major highways, the Worcester area is primed to meet rising demand for additional new distribution/warehouse facilities. The coronavirus pandemic has pushed businesses to retool their supply chains. Retailers and food goods suppliers have ramped up their e-commerce operations, securing new space to modernize their distribution operations with freezer and cooler capabilities for what they expect to be continued strong demand for services such as online grocery delivery.
- Robotics: Amazon Robotics consolidating offices and moving to Westborough at the former Astra Zeneca site will no doubt result in additional spin-off activity by other robotics-related companies. The city’s educated workforce and 11 colleges (especially WPI and its acclaimed robotics engineering department); and its cost of living makes Worcester uniquely ready to attract other robotics companies.
We expect all of these sectors to fire up quickly as we emerge from the pandemic. And, we expect that the top two pillars of the Worcester economy – the healthcare and education sectors – will continue opening additional medical offices, classrooms, and student housing downtown.
Finally, Worcester’s six census tracts designated as opportunity zones will continue to make a difference. With significant tax savings, investors are able to improve their risk management models and take on projects that otherwise would not be feasible. And that makes Worcester’s value proposition even more attractive.