We’ve seen it in cartoons. The kids on snow days do the field research. A snowball starts rolling from the top of a hill, gaining speed and mass along its journey.
At a certain point, the sheer momentum appears to be doing the work, creating the magic that spurs the growth and the fuel. Worcester’s downtown development is starting to look like that snowball.
Downtown residential sites are at or near capacity. A burgeoning foodie market is getting bolstered by brand name and destination restaurants. Developers and investors from Boston to Los Angeles are putting down dollars to get on board. Oh, and the Red Sox Triple-A affiliate, the WooSox, is just over a year away from the opening pitch in its brand new home, Polar Park, currently under construction in the Canal District.
CitySquare was certainly one of the critical kicks that got the snowball rolling. The $565 million public-private project boasts the 640,700-square-foot office and mixed-use Mercantile Center, Unum Group’s 214,000-square-foot office building, Saint Vincent’s Hospital’s 66,000-square-foot Cancer and Wellness Center, a 170-room AC Hotel by Marriott, a 550-space underground parking garage and a 365-unit residential development with 13,000 square feet of ground floor retail. Mercantile Center is owned by the Wellesley-based Franklin Realty Advisors, which also owns the Worcester Business Center –– formerly the Thom McAn Building –– at 67 Millbrook Street.
Other Boston area developers are taking notice, too.
Madison Properties is developing the 17 acres of the former Wyman Gordan industrial land, adjacent to Polar Park. The development will feature Worcester’s first new Class A office building in 30 years, 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.
Another Boston firm, Synergy Investments, entered the Worcester market in October via the $16.5 million purchase of the 24-story Worcester Plaza. The appeal of investing in the office building at 446 Main Street was driven by both the Worcester market’s progress and fundamentals for growth.
And that purchase came on the heels of the $28.8 million sale of the Sky Mark Tower to Los Angeles-based Benedict Canyon Equities. The 24-story apartment building has 206 units.
The Menkiti Group, based in Washington, D.C., has also taken notice. The firm has been buying up properties along Main Street around the Theater District. Founder and CEO Bo Menkiti has noted Worcester’s strategic location, diverse economic base, relative affordability and entertainment offerings.
That list of offerings is about to get longer, too, with some big additions heading to Mercantile Center.
Ruth’s Chris Steak House, the international chain headquartered in Winter Park, Florida, will be opening an 8,284-square-foot restaurant in Worcester in 2020. Plans call for seating for 270, with 70 more in an outdoor dining pavilion.
And in 2021, Broadway Hospitality Group of South Boston plans to open a 12,000-square-foot, two-story indoor and and outdoor restaurant. The company owns multiple restaurant brands, including Tavern in the Square, which has locations in Shrewsbury and Northborough. Their new Worcester restaurant will seat 500, including the rooftop seating. As for the roof itself, that just might be retractable.
Worcester, like the snowball, is clearly moving with momentum. But what is the magic providing the fuel and growth? The kids know conditions have to be just right: powder dry snow just won’t make a snowball. There has to be some moisture to help it bind together. And that constant force acting on the snowball rolling down the hill? Gravity.
And in Worcester, key conditions are proving to be right for investors. Developers like the city’s central location. They like that it’s a college town. They appreciate that it’s affordable, especially relative to places like Boston. And the arrival of the WooSox has been mentioned time and again as a magnet drawing development to downtown.
But there needs to be a “gravity” in the equation –– a constant force to keep the momentum moving forward. In this case, the “gravity” could be “strategy.” Notably, the developers coming to town have not only noted Worcester’s assets, but also strategies to keep driving the growth.
One common theme is the need for residential units. According to Charles “Chip” Norton Jr., owner of Mercantile Center, more residents living downtown will lead to more retail opportunities.
The market seems to have the appetite for it. The recently sold Sky Mark Tower is 92 percent occupied. The 365 units at 145 Front at City Square and 55 units at Central Building are at 99 and 100 percent, respectively.
While Norton is encouraging the city to look at a five or 10-year plan as part of a downtown strategy, Menkiti has noted developers can also be thinking in terms of community building. For him, some keys include finding ways to keep the population of college kids after they graduate, and keeping the downtown vibrant and lively 18 hours a day.
Whatever pieces might be missing now, developers around the country are paying attention and getting ready to invest.
###Kelleher & Sadowsky Associates specialize in commercial real estate brokerage in Worcester and throughout Central Massachusetts. Our services include landlord/seller representation, tenant/buyer representation, mortgage brokerage, capital markets, and business brokerage. For more information contact [email protected] or call 508-755-0707.