Developer seeks $40M for Opportunity Zone site in downtown Newark
Less than two years after acquiring a 0.62-acre site in downtown Newark, a developer has tapped Meridian Capital Group to market it as a multifamily investment in one of the city’s many Opportunity Zones.
An investment sales team led by David Schechtman, a senior executive managing director at Meridian, is advising Lakewood, New Jersey-based Acier Holdings as it seeks $40 million for the redevelopment site at 289-301 Washington Street.
The 594-unit project, known as The Halo, will include 20 percent affordable housing and be eligible for a payment in lieu of taxes for up to 30 years, according to New York-based Meridian. Property records show that a limited liability company connected to Acier paid $10.1 million in November 2017 to acquire the site, which is proximal to Essex County College and the Prudential Center, a multi-purpose sports and entertainment arena.
Meridian’s Schechtman told The Real Deal that Acier has invested an additional $4 million in soft costs and another $4 million in financing for a 24-month term.
“What we’ve really seen in Newark is rental rates go up from $10 per-square-foot to $40 per-square-foot,” he said. “Newark has retained its character… but the second-most inviting thing about this [site] is that there are so many development sites on the market that are priced preposterously. We’re asking for just under $65,000 per unit.”
JerseyDigs reported last summer that plans for the complex, which has been designed by Newark-based Minno & Wasko, call for two towers consisting of 132 one-bedroom units, 99 two-bedrooms and 66 studios. The Halo will also potentially have 300 parking spaces, a pair of 2,935-square-foot sky lounges and nearly 4,500 square feet of fitness center, club and game room space.
The site, located near RBH Group’s Teachers Village project on Halsey Street and three blocks from the Washington Street light-rail station, reportedly secured final approvals for a 40-story development last September.
Schechtman touted the Brick City’s centrally located OZs and PILOT that the site is eligible for, noting that such financing structures will help drive new investment capital into commercial real estate in Newark, especially after New York’s new rental reforms.
“In light of the recent draconian legislation passed in New York, which is having a further chilling effect in any and all types of development, it is wonderful to just cross the river and have Newark welcome with open arms the revitalization of the downtown,” he said. “In Jersey City and Newark… you’re going to see rental rates going up as developers flock to New Jersey because [the state] still embraces new development with opened arms.”
TRD reported earlier this year on the Rockefeller Foundation and Newark-based Prudential Financial backing a $5.5 million initiative to help six cities, including Newark, reap the benefits from OZs.
In July, another real estate firm began marketing a 33,572-square-foot OZ site in downtown Newark for $16 million, while a nearly 300,000-square-foot office building at 550 Broad Street also traded within an OZ. Property records show the latter was sold for $19 million.