If critical mass is what Newark needs to fuel its long-awaited renaissance, the city is well on its way to achieving that.
That was one message last week from commercial real estate leaders at the Newark CRE Summit, an event highlighting economic development in the state’s largest city. Speaking on a panel focused on new construction and investment opportunities, a group of industry insiders said Newark finally has something it had been missing in recent years: a collection of simultaneous projects that will both create a market and provide options to prospective residents.
Wasseem Boraie, executive vice president of Boraie Development LLP, noted the city now boasts five to 10 “major Class A projects” under construction or in the pipeline, comprising thousands of units. That’s an encouraging reversal from the past, he said, when city officials clung to a “big-bang theory” that one major project “would unleash all the potential in Newark.”
“Residential consumers are not going to come to a huge city for one project,” said Boraie, whose firm is building a 168-unit residential high-rise on Rector Street. “So the thing that the administration is doing very smartly now … (is that) there are going to be choices.”
It’s a model that has worked in other cities such as Jersey City and New Brunswick, he said, noting that additional choices also lead to more investment opportunities and the attraction of private capital.
But panelists also said it’s not easy to bring projects to the finish line, perhaps explaining why the city had not reached this point sooner.
“These projects take some time,” said Richard Tucker, CEO of Tucker Development Corp., whose completed and ongoing projects in the city total about $130 million in value. “Each of these projects were a combination of private capital, traditional debt as well as subsidies (at the city and state level).”
Tucker’s Highland Park, Illinois-based firm is preparing to open its Springfield Avenue Marketplace project in the city, following the opening of its Courtyard by Marriott hotel in the city’s downtown in 2012. The Springfield Avenue property includes 152 market-rate apartments and retail space anchored by a ShopRite, with about 70 percent of the total retail space having been leased to date.
The panel discussion, moderated by David Wolfe of Livingston-based Skoloff & Wolfe P.C., was part of the daylong program staged Thursday by CapRate Events. The event drew a large crowd of real estate leaders and professionals to the Newark Club, with sweeping views of the city as a backdrop.
Jose Cruz, a senior managing director with brokerage firm HFF, said the momentum in Newark will ultimately help attract the types of real estate investors that seek opportunities in Manhattan and increasingly around the Hudson waterfront. To date, though, there simply haven’t been enough opportunities in Newark to draw that type of “large, institutional capital.”
“It hasn’t quite made it to Newark yet, but we’re hopeful,” Cruz said. “We’re working on a significant transaction here in Newark in the next couple of months, (and) … when we do bring that property to market, I think it’s going to redefine and show where that capital wants to be.”
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