Newark Regional Business PartnershipAnnual Real Estate Market Forecast: Will Smart Growth (or Any?) Prevail?
Tuesday, March 2, 20108:00 10:00 a.m.Best Western Robert Treat Hotel50 Park PlaceNewark, NJ 07102
Hear from NJEDAs chief executive about the newest state incentives and from developers on how they believe these changes will or will not improve the progress of development in Newark and beyond. Is this just another real estate cycle or have we charted new territory? Will commercial refinancing further dampen the office market?NRBPs annual forecast will also feature a review of economic conditions by the Federal Reserve Bank of NY with special emphasis on the factors affecting the real estate climate, with details on the real estate climate provided by Studley.Speakers and panelists include: Rae Rosen, Federal Reserve Bank of NY; Philip Lipper, Studley; Caren Franzini, NJEDA; Ron Beit, RBH Group; Wasseem Boraie, Boraie Development; Carl Dranoff, Dranoff Properties; Dave Gockel, Langan Engineering and Environmental Services; Michael Shenot, Jones Lang LaSalle; and Ted Zangari, Sills Cummis & Gross P.C.Series sponsored by TD Bank. Breakfast sponsored by Boraie Development; Federal Reserve Bank of New York; Jones Lang LaSalle; Langan Engineering & Environmental Services; New Jersey and Company; NJEDA; PSE&G; RBH Group; Sills Cummis & Gross P.C.; Skanska USA Building Inc.; Studley; and The Star-Ledger.For more information and to register, please go to http://www.newarkrbp.org or call the event registration line at 973-242-4203.Barbara E. KauffmanExecutive Vice PresidentNewark Regional Business Partnership744 Broad Street, 26th floorNewark, NJ 07102-3802973-242-4219973-824-6587 firstname.lastname@example.orgBUY NRBP! Do Business with Members
In his State of the City speech Mayor Booker announced that Pitney Bowes would be relocating it’s international mail sorting facility to Newark, NJ as reported in the Real Deal among press outlets. This means nearly 200 jobs brought to Newark, 180 immediately and 25 over the next 5 years.
Beyond the immediate economic and employment impact this move highlights the competitive advantages the City of Newark possesses. Logistically there is no city comparable on the eastern seaboard. Newark is a hub for land, sea and air transportation with Newark Liberty International Airport, the Port of Newark, CSX, Norfolk Southern and Conrail freight terminals and Interstate 95 , 78, Route 1 & 9. newark is less than 20 minutes from Manhattan and located nearly midway between Boston and Washington.
What else could a business ask for? Oh right incentives. The Deal was consummated through the efforts of the Newark UEZ and the Brick City Development Corporation which were able to provide financing, tax incentives and long term tax breaks for Pitney Bowes.
This is another big win for Newark and one more step toward a tipping point making the world aware of the strategic benefits of Newark.
It has been a wild week for downtown Newark and a great start for 2010. Here’s a quick recap…
First we have the brewing deal to bring the Nets to the Prudential Center for the remaining two years of their IZOD Lease. Big for a number of reasons including legitamacy of downtown as a destination, validation of the Pru center as a world class arena, and additional business from nightly events in Newark during the hockey and basketball seasons.
Next is the 600,000 sqft lease of the IDT building and 765 Broad Street. Even if some of this square footage is a reshuffling of existing Newark office space it fills one of the main components of the Newark skyline, justifies the Washington Park market for class A space and sets a price point for future leasing.
Finally we have the news that Marriot will be opening a new hotel at Broad and Lafayette newt to the Pru Center. The 150 room Marriot Courtyard will have 15,000 sqft of retail space and be the first major hotel developed in downtown Newark in 39 years. The significance goes well beyond the jobs, hotel guests and new retail. This hotel has exceptional benefit for the Prudential center for boooking major events. Many events require hotel space within the immediate proximity of a venue. For example the only thing keeping the NHL Finals from coming to Newark was the lack of required hotel rooms in the immediate area. See the article from the Star Ledger.
All in all this is outstanding news for Newark’s businesses, politicians, property owners and residents.
As reported by NJBiz today a state agency will be taking space in the IDT building and 765 Broad Street. This is great news for Newark not only for office space but for retail and residential. The more people coming to Newark on a daily basis the better for everyone.
Bond ratings in NJ Municipalities are getting downgraded faster than any other state according to this article from bloomberg.com.
From the article it appears that Irvington is one of the strongest downgrades.
Moody’s also lowered its rating on $71.3 million in debt issued by Irvington, a suburb of Newark where a fifth of schoolchildren between five and 17 live in poverty and the unemployment rate is 1.4 percentage points above the state’s 9.7 percent rate.The firm on Dec. 17 cut the debt rating to Ba1, one level below investment grade, from Baa3, and said it may lower it further, citing concerns over how the town will close a $12 million budget gap and make up for a $50 million, or 1.7 percent, decrease in its tax base over the past two years.
“This is a reality that cities are facing across the country,” said Irvington Mayor Wayne Smith, 52, a Democrat who serves as president of the state’s urban mayors association. He said the city plans to cut the deficit in half by furloughing about half of its 600 employees once a month until the end of the fiscal year and selling a shuttered hospital.
What about Newark?
Newark, New Jersey’s biggest city, hasn’t had any of its $293 million in long-term debt downgraded even after losing $2.2 million of the $118 million in state aid it was scheduled to receive this year. Funding from New Jersey comprises 17 percent of the city’s $77 million budget. Municipal officials plan to hold a conference call with Moody’s raters to discuss the loss of assistance and how that will alter the current year’s financial plan.“This is something everybody is aware of right now,” said Linda Landolfi, Newark’s chief financial officer. “It’s a big deal because it’s costly to have your interest go up.”
Let’s hope that the conference call doesn’t change the minds of the people at Moody’s. Newark has a lot going for it right now and a lot going against it. Higher lending rates are one obstacle the city doesn’t need.
Phase I of vertical construction at the Riverbend District is scheduled to begin in 2010 and will feature more than 800,000 square feet of retail space, including an anchor grocery and retailers, a 16-screen cinema and restaurants; a 175-room hotel and a 350-room, full service hotel with 25,000 square feet of conference space; a wellness center; corporate and boutique office space; and approximately 1,900 for-sale and rental residential units.
So it appears that development is not dead – even in this difficult market. Now let’s see some activity around the Prudential Center.
Many of you out there may read this headline and think, “What else did you think it was linked to?” but it is important to highlight that which may be obvious to owners, investors and operators in the Newark/Elizabeth Port area to those who truly have no comprehension of what drives economic activity.
NAIOP held a conference in Newark last week that was reported on by Globe St.com here. The conference discussed many issues surrounding economic activity, port development and the NJ Industrial real Estate market.