Photo I Courtesy of Kelleher & Sadowsky
Jim Umphrey, president of Kelleher & Sadowsky
Updated: 3 hours ago
Real Estate Report: Office
A tale of two towers: The Mercantile Center and The Glass Tower's efforts to become go-to downtown destinations
Photo I WBJ File
The Mercantile Center was taken over by Franklin Realty Advisors in 2015.
By Christine Lavosky
Worcester’s two tallest office buildings have had quite the wild ride over the past 10 years, taking very different paths to again becoming premier destinations for companies wanting to be located downtown.
The Mercantile Center, which is actually three buildings at 100-120 Front St., has achieved the highest occupancy rate in its history, at 98% leased. This came after developer Chip Norton and his Franklin Realty Advisors in Wellesley took over the complex in 2015 and have since invested $90 million in renovations.
The Glass Tower at 446 Main St. has taken a far rockier route. At one time beset by an onerous lease with Santander Bank of Boston and hamstrung at the start of the coronavirus pandemic, the building was bought by Boston real estate firm Synergy Investments using a new federal tax incentive. Today, Synergy is adding amenities to attract tenants and just landed 110-year-old law firm Bowditch & Dewey, bringing the building’s total occupancy to nearly 80%.
“One of the biggest things [commercial tenants] want is amenities because you have to make the space nice for people to say, ‘Yeah I’d like to go back to work,’” said Jim Umphrey, president of Worcester real estate brokerage Kelleher & Sadowsky, which has handled sales and leases for both properties.
A chart of the Mercantile Center and The Glass Tower
Becoming The Mercantile Center
When Franklin Realty took over the property at 100 Front St. in 2015, it wasn’t even branded as The Mercantile Center. Part of Norton’s $90-million renovation of the facility was fixing up the common area on the first floor, which he decided to leave as open space so it could serve as somewhat of a community-gathering place, similar to how it was as part of the old Worcester Center Galleria mall.
Photo I Courtesy of Franklin Realty Advisors
Chip Norton, managing director of Franklin Realty Advisors
By Norton’s own admission, this is unusual for an office building, but this decision added a communal atmosphere to the space, where people like students from the nearby MCPHS University could hang out.
“I felt that we could do more for the community, be more of a public space ... that anybody could access and use,” said Norton. “We have students periodically come over and use our lobbies for studying and meetings, as do a lot of the other tenants in the building.”
Commercial tenants at The Mercantile Center include the two largest law firms in Central Massachusetts: Mirick O’Connell and Fletcher Tilton. Overall, the complex boasts 457,000 square feet of mixed-use space, a 1,647-space structured parking garage, five onsite eateries, and an outdoor plaza.
“We still have 50-60,000 feet of retail [space] that we’re working on both [the] first floor and below grade [at] the old Foothills Theater,” said Norton.
Improving The Glass Tower
While Norton took over The Mercantile Center during a period of economic growth, Synergy took over The Glass Tower mere months before the coronavirus pandemic and was hit hard by difficult lease terms during an uncertain time globally for office space, said Umphrey.
“You kind of couldn’t make it up,” Umphrey said.
Photo I Courtesy of Franklin Realty Advisors
The Mercantile Center includes a large outdoor gathering space between its main tower and parking garage.
At one time, Sovereign Bank owned The Glass Tower. Upon its purchase, the bank, which was later acquired by Santander, realized it was undercapitalized, he said. Sovereign decided to do sale-leaseback on the building, where it would remain obligated as the tenant of the whole building and for subleasing the spaces it wasn’t using.
Santander had much of the control over how the rest of the building would be leased and improved, Umphrey said.
Synergy bought The Glass Tower in October 2019, only five months before the coronavirus pandemic hit. When the master lease with Santander expired on July 20, 2020, every other tenant’s lease expired as well, he said. Every business in the building became a tenant at will, giving them the ability to leave.
“This was a period of time when people didn’t really know what the world was going to look like,” Umphrey said.
Synergy Investments declined to be interviewed for this article.
Fortunately, Synergy had bought The Glass Tower as part of the Opportunity Zone program, a federal tax program incentivizing investment in lower-income neighborhoods established as part of the Tax Cuts and Jobs Act of 2017 under President Donald Trump. For the first seven years of owning the property, Synergy doesn’t have to pay capital gains tax on it. Furthermore, if it sells the property, the company doesn’t have to pay any taxes on that profit.
The program allowed Synergy more financial freedom to invest into the building, Umphrey said.
The Glass Tower now includes an upscale event and conference space on the top floor, a fitness center with lockers and showers, onsite daycare, an internet lounge for tenants, and four eateries, along with nearby parking.
These types of amenities will be key in helping The Glass Tower fill up more of its commercial spaces, Umphrey said, and perhaps reach The Mercantile Center’s level.
“If you go into a building that is really not very nice, doesn’t have any amenities, is older, people are like, ‘I'm just going to work at home,’” he said.
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