A rendering of the redeveloped facade and retail space, viewed from Mercantile Street. Rendering courtesy of Front Street JV LLC.
A major new tenant has signed on to the partially demolished former Worcester Center Galleria mall that will help trigger a $70 million redevelopment downtown.
University of Massachusetts Memorial Health Care has leased 74,600 square feet in the former mall, a transaction that will prompt a $70 million redevelopment headed by Wellesley-based Franklin Realty Advisors and Great Point Investors of Boston.
Space in the former Worcester Center Galleria mall will be converted into offices for 500 employees in the company’s IT division, who will occupy the refurbished space by the end of 2017, developers announced Monday. The IT division is expanding and relocating from the company’s Shrewsbury Street campus, said Gary Schwandt, a principal at Great Point Investors.
The UMass lease will fill more than half of the available space within the former mall, which closed in 2006. Boston-based Berkeley Investments and Starwood Capital acquired the property in 2004 and partially demolished the structure. Remaining tenants in the former mall section include the Registry of Motor Vehicles, CVS and medical offices, leaving approximately 60,000 square feet available following the UMass lease.
“Other (potential) buyers have thought of this as retail, but we think about this as back office space with retail amenities,” Schwandt said.
The $32.5 million acquisition, which closed Oct. 15, also includes the 100 and 120 Front St. office towers, which are 80 percent leased to tenants including the Worcester Telegram & Gazette and Reliant Medical Group, and a 1,647-space parking garage.
The developers plan to spend $36 million to install a new facade and common-area amenities, Schwandt said.
“We’re going to take the common areas and make them more human-scale and friendly,” Schwandt said. “They look like a mall that’s been abandoned for 10 years. We want them to look more like office lobbies.”
UMass Memorial Health Care will open a 20,000-square-foot training center in the 90-100 Front St. office towers by the end of the year.
Great Point is investment manager for the New England Carpenters Combined Benefit Funds. The Front Street JV LLC group also includes Worcester-based equity investors.
Wells Fargo Bank and Fidelity Bank of Worcester provided $46 million in debt financing.
