A joint venture has purchased three of the four Gateway Center buildings in Newark with plans to spend millions upgrading the properties.
The partners – Prudential Financial, Garrison Investment Group, Onyx Equities, Taconic Capital Advisors and Axonic Capital –are setting aside up to $50 million to open new storefronts on the exterior walls of the buildings and help reintegrate the complex with the Newark streetscape, according to the Wall Street Journal. The properties are among the first buildings commuters see upon entering the city from Newark Penn Station.
The purchase price was $300 million, a source close to the deal told The Real Deal. Austrian lender BAWAG P.S.K. provided a $238 million loan. A JLL team of Jonathan Schwartz, Aaron Appel, Adam Schwartz and Max Herzog arranged the debt.
The joint venture’s buy of 1.8 million square feet of space at One, Two and Four Gateway Center also includes sites that have between 500,000 and 800,000 square feet of possible development space. The deal was valued at roughly $300 million.
Overall, Newark has about $4.5 billion worth of development underway and has added 1,085 units of market-rate apartments between 2015 and 2018. However, it is still struggling with issues including a 28 percent poverty rate and elevated lead levels in drinking water.
Newark Mayor Ras Baraka told the Journal that the Gateway Center investment has put the city in a good position to receive investments in the Opportunity Zone program, and he is confident about its chances at revival.
“We have a long way to go, and we are still crafting what we need to see,” he said, “but we have enough clay to do that.” [WSJ] – Eddie Small