The 250-unit Urby in downtown Newark features luxury amenities. Photo: Courtesy of Urby
Giuliano Correia, a flight attendant based in Newark, knows about the city’s gritty reputation. But, in need of affordable rent and a speedy commute, he moved into the Urby, a luxury building downtown. He and a roommate pay a total of $3,100 a month for a two-bedroom apartment.
“It takes me 13 minutes on the bus to get to the airport. That’s insane,” says Correia, 46, who is also a freelance photographer. He often treks into New York City, less than half an hour from Newark Penn Station. “I’m in Newark because of its connectivity and affordability,” he says.
Developers are spotting the same advantages. After decades of being stigmatized and shut out of redevelopment trends, the corridor along the train line in eastern Essex County is seeing a surge in luxury-apartment construction.
A courtyard at the Urby. Photo: Courtesy of Urby
More than 16,000 new units are either complete, under construction, or proposed for Essex County. Developers are betting that residents priced out of New York City and New Jersey’s Hudson River waterfront will be willing to move west. Local leaders say the new housing also addresses an existing demand within these cities.
“We’ve been predicting for a long time that Newark was the next big thing to happen, and it’s happening,” says Jeffrey Otteau, a Matawan-based real estate economist who tracks markets nationwide. He says the same trends apply to Orange and East Orange.
The redevelopment has been buoyed by tax breaks and public spending, including the multimillion-dollar renovations of train stations in all three cities. “If you look at even 10 years ago, there was very little major development going on, aside from public projects,” says David Barry, founder and CEO of Urby, which has nationwide properties, including the $90 million, 250-unit adaptive reuse of the 1920s Newark structure first built as a parking garage. “Over the last five to eight years, there’s much more private capital coming in.”
A yoga studio at the Urby. Photo: Courtesy of Urby
There’s even a little star power in the mix: Basketball great Shaquille O’Neal is a partner on several Newark high-rises.
For the most part, development has taken place on formerly vacant properties, assuaging concerns about displacement. Local officials hope that the new apartments will help address New Jersey’s housing shortage—including the need for affordable units, which are required in many of the new buildings.
They also hope development will spark street life after business hours, as restaurants, bars and retailers open to serve new residents. “Residential construction brings retail to the city and helps fill up empty storefronts,” says Newark Mayor Ras Baraka.
The cities lie along New Jersey Transit’s Morris & Essex line, which offers one-seat Midtown Direct commutes to Manhattan in a half-hour or less—a major draw. Each city has two train stations. In addition, Newark has a light rail and is on the PATH line to New York City.
“There has been a rush in the region to exploit opportunities, to capitalize on the increased popularity around these transit-oriented developments,” says David Troutt, director of the Rutgers Law School Center on Law, Inequality and Metropolitan Equity in Newark.
It’s important for new development to improve quality of life for existing residents, he says. Toward that end, some of the projects have community-use components, such as one in Orange that includes a public recreation center, and another in East Orange that provides job training in the construction trades.
Newark
After the riots of the 1960s and the high crime in subsequent decades, few lenders or developers were willing to invest in Newark, the state’s largest city, with a population of more than 300,000. But crime is way down. According to the FBI, violent crime peaked in Newark in 1995, when more than 10,000 incidents were reported; by 2022, the number had dropped to 1,582. (Crime trends are similar in Orange and East Orange.)
Moreover, Newark is home to several major corporations, including Prudential and Audible, as well as entertainment and education powerhouses like the New Jersey Performing Arts Center, the Prudential Center and several universities.
“All of those things contribute to why people take a look at Newark,” Baraka says. “People like a comeback story and want to be a part of something that’s new.”
Baraka has made residential construction a priority. The city has eased zoning restrictions, sped up the approval process, and offered tax breaks to developers—typically, payments in lieu of taxes, or PILOTs, which tend to be lower than property taxes. Developers say their projects generally rely on these tax breaks, because market rents in these cities aren’t enough to cover construction costs.
To tackle the lack of affordable housing, Newark requires builders to set aside 20 percent of units for lower- and moderate-income tenants in projects with 30 or more units.
Students at the Newark campuses of Rutgers, NJ Institute of Technology, and Seton Hall Law School add to the demand for apartments. Tapashwi Karki, 23, an international student from Nepal, is paying $2,275 a month for a one-bedroom apartment at the Urby, next to Rutgers Law School. She describes the neighborhood as quiet, but with a number of ethnic restaurants. “I think it’s important to bring life back into a city and to get rid of the stigma,” Karki says. “It’s also important to open up opportunities for people already living here.”
J&L Companies, a family-run real estate firm active in Newark for decades, recently opened three buildings in the lively Ironbound area, including a 403-unit luxury building called Fifty Five Union and a 64-unit factory-to-residential conversion called Textile Lofts.
“We’re really focused on building the housing supply around Penn Station,” says Gabriel Lopez, who is a principal at J&L. “As an entrepreneur, landlord and developer in the community, and a former resident, we understand there is a need for greater and better living options.” Lopez, whose parents own the well-known, longtime restaurant Don Pepe on McCarter Highway, adds: “We want to see more people living, working and visiting Newark, enjoying all it has to offer and what our family has loved about Newark for decades.”
Along with the J&L properties and the Urby, other recent residential projects in Newark include the 296-unit Vermella on Broad Street, and two buildings developed by the Shaquille O’Neal partnership: 50 Rector Park, a 169-unit building near NJPAC, and the Iconiq, a 370-unit high-rise on McCarter Highway near Penn Station.
Looking ahead, both NJPAC and the Newark Museum of Art plan expansions that will add hundreds of residential units. And developers have made ambitious proposals for several massive high-rise projects that would total thousands of apartments: one at the site of the Iberia Restaurant in the Ironbound, another on the site of the old Newark Bears stadium on McCarter Highway, and a third at the IDT building on Broad Avenue.
At one current project, the Halo, planned as three towers with more than 950 units on Washington Street, construction halted over the summer in the wake of a dispute between the developer and its lender. The Halo’s problems may hint at a future slowdown in the building boom. Credit markets have tightened, and even when commercial construction loans are available, interest rates have soared.
East Orange
East Orange was a tony suburb in the early 20th century, with stately homes on tree-lined streets, a collection of well-appointed prewar apartment buildings, an upscale hotel, and a thriving shopping district around Central Avenue. The city’s fortunes waned in the latter half of the century, with many buildings falling into disrepair. But things began to turn around in this city of nearly 70,000 residents as redevelopment efforts geared up about a dozen years ago. Today, public and private improvements worth nearly $2.5 billion are underway in East Orange, where 4,000 new apartments are either complete, under construction, or before the planning board, according to city officials.
The Crossings at Brick Church Station in East Orange is a 9-acre, mixed-use development with 1,000 apartments and retail space. Rendering: Courtesy of the city of East Orange
Construction has begun at the largest, the Crossings at Brick Church Station, a 9-acre, mixed-use development of approximately 1,000 apartments and more than 100,000 square feet of retail space. The Crossings, which is valued at $500 million, is funded by a public-private partnership spearheaded by New York-based Triangle Equities, and codeveloped by Incline Capital, whose investors include Goldman Sachs. The project relies on a complicated mix of state and federal money and tax credits. Twenty percent of the units will be set aside for East Orange residents with lower and moderate incomes, and the construction includes a job-training component for locals.
Josh Weingarten, director of capital markets at Triangle, says the Crossings will be a “catalyst for economic growth,” eventually attracting national retailers.
“The challenge becomes how to get the commuters to spend their money downtown,” says Mayor Ted Green. As new development brings in residents with more disposable income, “we want it to be spent in the community,” he says.
Green says there have also been investments in public housing and parks. And federal and state money is funding upgrades to the train stations and City Hall Plaza. “Our goal is to make sure new people are welcome, and to make sure others can stay here,” Green says.
Blackstone 360, a family-owned company based in Newark, has created more than 800 high-end apartments in East Orange, helping to revive South Harrison Street, a once-premier address that had frayed. “We saw the secondary markets like East Orange and Orange that had all the advantages, but had languished for 60 years,” says Ibrahim Hasan, Blackstone 360’s managing director of finance and operations. The company bought the former Hotel Suburban on South Harrison Street in 2006, when it was vacant and filled with squatters and debris. It is now part of the luxury Indigo apartments, with doormen, a gym and gated parking.
Hasan says the area—so close to employment centers like the “recession-proof” hospitals and universities based in Newark and the large Veterans Administration Hospital in East Orange—was ripe for higher-end apartments aimed at young professionals. “We realized there are [potential tenants] who live in this market, but nobody had built them a quality product,” says Hasan. “Turns out there was a lot of demand.”
Hasan says he was rebuffed by national chains when he tried to fill the 10,500-square-foot ground floor commercial space at his firm’s latest project, a futuristic-looking apartment building, Lotus 315, on South Harrison Street that locals call “the spaceship.”
“Instead of continuing to court national brands that have failed to cater to the vibrant community in East Orange, Blackstone 360 pivoted,” Hasan says. Restaurant and market Sihana, from an acclaimed Newark restaurant operator, is slated to open a Mediterranean café and market concept at Lotus 315.
Orange
An estimated $160 million in development is taking place throughout Orange’s downtown near Main Street, with more than 1,000 new residential units near the city’s two train stations. And the biggest project yet is on the drawing board: a proposal to develop the 9-acre, former Orange Memorial Hospital, which is listed on the National Register of Historic Places, with 1,000 more housing units just south of downtown. Lakewood-based Symrec has been designated the developer, according to city officials.
The 209-unit Essex and Crane apartment building was completed last year on the site of a former factory and leased very quickly, says Adam Pasternack, president of property management for Russo Development Enterprises, based in Carlstadt.
The Orange train station is just out the back door of the building, where one-bedroom apartments go for just under $2,800 per month. “Everyone knows how well located Orange is; it was just a matter of time before multifamily developers wanted to locate there,” Pasternack says.
The firm has another project underway across the street, with 215 units scheduled to open next spring, and is working with the city to transform the former YMCA on Main Street into a development that will include housing and a city recreation center with an Olympic-size pool.
Mayor Dwayne Warren says Orange has relied on PILOTS and other incentives, such as state tax credits and funding opportunities that come along with the state designations as an Opportunity Zone and Transit Village. “In this economic atmosphere, all of [the developments] rely on some kind of PILOT,” says Warren. “We’ve been a partner in making sure we can provide the help.”
Officials hope the redevelopment will boost the 2.2-square-mile city with 30,000 residents, which suffered after its manufacturing base dwindled. Orange boasts old-school Italian restaurants and storefront Caribbean and soul cuisine; the new developments have attracted other options, such as Four City Brewing. Warren says there have been recent applications for a cigar bar and a tattoo shop. “We’re getting a more youthful population and looking toward trends related to them,” he says.
Patricia Alex and Kathleen Lynn are contributing writers at New Jersey Monthly.
[RELATED: How NJ Downtowns Are Reinventing Themselves in the Face of Change]
No one knows New Jersey like we do. Sign up for one of our free newsletters here. Want a print magazine mailed to you? Purchase an issue from our online store.