Worcester Business Journal

8 Worcester Business Journal | December 7, 2020 | wbjournal.com e planned demolition of the Greendale Mall into an Amazon warehouse marks the first time a New England mall has been converted into industrial use First of its kind The Greendale Mall is down to its last tenant, a T.J. Maxx and HomeGoods store. The rest of the mall has been blocked off. PHOTO/GRANT WELKER T he Greendale Mall, now down to a single tenant, wasn't especially unusual as a fading shopping mall at a time when retail is strug- gling and indoor shopping centers in particular have fallen out of fashion. But the Worcester mall's apparent fate as a future Amazon fulfillment center would make it a first: the only shopping mall in New England to be converted into industrial use, according to the national real estate firm CBRE, which tracks such shiing uses. e irony of the conversion – Am- azon replacing a mall whose former tenants it no doubt helped run out of business – would further the decline of such retail in the city of Worcester. e city once had two enclosed shopping malls – the Galleria, which refashioned itself as an outlet mall in its last attempt at success, closed in 2006 – will now have none. Today, the Greendale Mall has only a single tenant: a T.J. Maxx and BY GRANT WELKER Worcester Business Journal News Editor HomeGoods store. e rest of the mall is blocked off. An initial plan by Boston developer Finard Properties to remake the Green- dale Mall as a denser mixed-use lifestyle center has been pushed aside in favor of a sprawling distribution center to take advantage of the site's proximity to I-190 and I-290. The e-commerce trend Other malls in Massachusetts have been repurposed before, including one in Fall River that became an outdoor shopping center, and two similar projects underway now in Hanover, Watertown and Woburn. e Greendale Mall will be the first in New England to be made into an industrial site, accord- ing to CBRE. e trend is driven by e-commerce, according to the real estate firm, which counts 59 such projects nationally since 2017, as of July. In total, 13.8 million square feet of retail space was converted into 15.5 million square feet of industrial use. In the Greendale Mall's case, the Amazon warehouse will be far smaller: less than a third of the size of the mostly empty mall it's slated to replace. Underperforming retail sites have become ideal for so-called last-mile warehouse developers – generally small- er centers than the biggest fulfillment centers – because they're typically near population centers and already have large parking lots, CBRE said. Amazon has been gobbling up space nationally during the pandemic. e company said in an earnings call in late October it plans to expand its fulfillment and logistics square footage by 50% this year, predominantly in the third and fourth quarters. Amazon has 726 facilities across the country and another 247 in the pipeline that would bring its footprint to 347 million square feet, ac- cording to the logistics industry analyst MWPVL. "Amazon's industrial growth – both locally and nationally – has been nothing less than remarkable," Aaron Jodka, an analyst for Colliers International in Bos- ton, wrote in a market report in August. at growth includes new warehouses across Central and Eastern Massachu- setts, according to the real estate firm Hunneman. In the third quarter alone, Amazon signed leases for 322,000 square feet in Milford, a site later sold in No- vember for more than $50 million, and more typically sized facilities ranging from 148,000 to 193,000 square feet in Hingham, Norwood and Salem. It signed new leases in Canton and Taunton this year, following two Central Massachu- setts additions late last year in Belling- ham and Northborough. It has proposed a 3.8-million-square-foot warehouse in North Andover. "Being that Amazon has the pockets to do so, there are rumors of the online retail giant taking on retail store and mall conversions," Hunneman foreshad- owed. Greendale Mall-to-Amazon Amazon hasn't committed to the Greendale Mall site but the hints are obvious in permitting applications for the property: e number of planned electric vans matches exactly those of Amazon's climate-related goals, and a planned gray and blue exterior matches what the company typically builds. Am- azon doesn't yet have a fulfillment center in Worcester or adjacent towns. Finard Properties, the Boston devel- opment firm that bought the mall in December 2019 for $7.1 million, has applied for permitting approval from the city to demolish the mall and build the new warehouse. e planned single-sto- ry, 121,000-square-foot warehouse re- quires site plan approval and is slated to go before the Worcester Planning Board. e firm has declined to offer more details on the plan. Finard initially offered a far differ- ent plan, with apartments and medical PHOTO/GRANT WELKER The Greendale Mall in Worcester has suffered a slow death over the years, with tenants leaving and a sometimes obvious lack of upkeep.

• Cover