Norton buys 120 Front St. for $15M as Mercantile Center restructures
SAM BONACCI
The downtown Worcester office towers at 100 Front St. (left) and 120 Front St.
The 120 Front St. building in the Mercantile Center in Worcester has been sold to the project’s managing director for $14.9 million as part of a $90-million recapitalization of the project.
Front Street Capital, managed by Chip Norton, announced a recapitalization of the two-building, 646,000-square-foot project that included Front Street Capital and a new group of mostly local investors purchasing the member interest of Boston-based Washington Capital Management, formerly the majority investor in the project, for $90 million.
“Today, this recapitalization will provide us with the perfect opportunity to further the development of Worcester, with hopes that the downtown area continues to thrive and serve our businesses and the community,” Norton said in a statement. “We appreciate the local consortium of investors for sharing our vision and commitment to downtown Worcester. Now that we have substantially completed the leasing of our office space, the recapitalization gives us the means needed to devote our financial and human resources to the leasing of over 50,000 square-feet of available retail space."
That refinancing includes $75 million in bank debt from four local lending institutions and more than $15 million of equity contributed from organizations and individuals in the Worcester community.
According to the Mercantile Center, the purchase of 120 Front St. raises the level of private capital investing in downtown Worcester by $4.8 million in equity from local investors and $15.3 million in debt by Cornerstone Bank.
The restructuring of the project, which also includes 100 Front St., and 90/11 Front St., raised $10.3 million in new equity. Combined with the remaining investment group, represents a total equity contribution of $15.5 million, according to the press release.
Country Bank provided debt financing of $59.3 million as the lead lender in conjunction with Fidelity Bank and tenant of 100 Front St., Webster Five.
In a statement, Rich Leeret, director of real estate at Washington Capital Management, called working with Norton, city officials and the business community a wonderful working experience.
“Washington Capital strongly believes that we, alongside Franklin Realty Advisors and Front Street Capital, have taken these buildings and turned them into very contemporary and attractive work spaces for the overall benefit and development of downtown Worcester,” Leeret said.
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