A vacant office tower in Massachusetts has been transformed into 198 apartments, while a neighboring building offers 22 income-restricted condos — providing new housing and a more affordable path to homeownership in downtown Worcester.
Here's what to know
Boston-based real estate firm Synergy converted Fallon Health's former headquarters into an 11-story apartment building, according to the Worcester Business Journal. The project is the largest office-to-residential conversion in Massachusetts.
The $73 million renovation took just 16 months and finished on budget. By comparison, Synergy founder and CEO Dave Greaney said a similar new-construction project generally takes two years or longer.
The tower's apartments are market-rate rentals, separate from the income-restricted homes next door.
Prices for the 22 homes range from $209,300 to $261,650. At the adjacent four-story building, now known as 22 Elm, Synergy partnered with nonprofit developer Planning Office for Urban Affairs on a $14 million condominium project.
Greaney said sales of 16 condos were either complete or underway.
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More background
Worcester City Manager Eric D. Batista noted that demand for office space declined following the COVID-19 pandemic, while the need for housing rose significantly.
The Worcester Business Journal described the condos as the first lasting opportunities for affordable homeownership in downtown Worcester in more than three decades.
The rental tower includes 74 studio apartments, 84 one-bedroom apartments, and 40 two-bedroom apartments. According to Altitude Worcester's leasing website, certain studios start at $1,895, while some two-bedroom units rent for $4,100.
Apartments range from 404 to 1,211 square feet. Amenities include a rooftop deck and pool, along with fitness and pet spa facilities.
Massachusetts Housing Secretary Juana B. Matias noted the buildings' proximity to public transportation.
"And with Union Station just a short walk away, residents will have access to public transportation and commuter rail connections to jobs and opportunities across the region," she said, according to the Worcester Business Journal.
What's being done?
The condos are restricted to residents whose earnings equal 80% of area median income and whose assets do not exceed $155,000, according to the Worcester Business Journal.
Synergy also provided an interest-free construction loan. Support from MassHousing's CommonWealth Builder program, Worcester's Affordable Housing Trust Funds, foundations, and Synergy helped keep sale prices below renovation costs.
The apartment conversion received $47.57 million in financing from Washington Trust and a $3.6 million MassDevelopment bridge loan tied to Housing Development Incentive Program tax credits.
Other incentives included an HDIP award totaling $4 million, a $3.6 million Commercial Conversion Tax Credit from the state's Executive Office of Housing and Livable Communities, and a 15-year tax increment exemption from the City of Worcester.
Matias said the state's Commercial Conversion Tax Credit Initiative, which helped make Altitude Worcester possible, has backed the creation of over 1,000 rental homes. CommonWealth Builder supported the affordable homeownership opportunities next door.
"Altitude Worcester set out to prove that large-scale office-to-residential conversion could work in Massachusetts and to do it with real, lasting affordability," Greaney said, according to the Worcester Business Journal. "Today, residents are calling 24 and 22 Elm home, and downtown Worcester has new neighbors supporting its restaurants and businesses every day.
"Conversions are one of the fastest tools we have to add housing and this project shows what's possible when the public and private sectors pull in the same direction."
Where can I learn more?
Worcester projects reflect Massachusetts' push to add housing and make it more affordable.
• Boston could cover developers' infrastructure costs to help revive stalled housing projects.
• Massachusetts directed $18.2 million toward two Cambridge housing projects, paving the way for 162 affordable units.
• Massachusetts is 15.6% toward its housing goal as its housing chief backs site review reform.
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