For Newark, Revival May Owe
A Lot to Location and Affordability

Newark has largely defied the old real-estate maxim of "location, location, location." The largest city by population in the country's most densely populated state, Newark is home to one of the world's busiest airports and a short train ride from the global financial capital of Manhattan.

Yet in recent decades, much of the city hasn't realized the potential its geography affords.

Newark, which began as an industrial port city, evolved in the first half of the twentieth century into a commercial hub with a strong insurance sector; Prudential Financial Inc. still has its headquarters in the city. It boasted cosmopolitan retail offerings on Broad Street, and world-class architecture, as well as the Frederick Law Olmsted-designed Branch Brook Park.

But perhaps more than some other older industrial cities, Newark fell into a decline that many say was accelerated by the race riots of 1967. There are some healthy corridors of real estate, such as the Ironbound neighborhood and the high-end office buildings near the Penn Station train hub, an area that commands pricier asking rents than the northern New Jersey average. But vacant lots still dot the city, and the commercial real-estate market has struggled to make a broad-based recovery from the crime and urban blight of recent decades. White flight to the suburbs helped shrink the city's population by about one-quarter to 273,546 in 2000 from 1960, and last year 22% of Newark's families were still living below the poverty level, more than double the national average, according to the U.S. Census Bureau and the 2005 American Community Survey.

Some say the picture may be changing, thanks in part to the city's affordability in comparison to the glitzier Big Apple, a national trend toward urban living and an increasing roster of large capital projects. All have helped to attract about 7,000 new residents since 2000, reversing a decades-long slide and increasing the confidence of a handful of real-estate investors. "When I first started teaching, I focused on the reasons why a truly great and dynamic and heterogeneous city could be unraveled so quickly," says Rutgers University History Professor Clement Alexander Price. "Over the last five years the focus has been what went wrong and why the city now seems to be recovering."

Many trace the beginning of the resurgence to the opening of the New Jersey Performing Arts Center in 1997. More recently, construction has begun on a new hockey arena for the New Jersey Devils, and this summer the city has enjoyed something of a redevelopment trifecta. A new light-rail system that links Newark's two train stations began operating; a developer completed conversion of a 1930s office building and began marketing 319 units billed as the city's first luxury rental apartments in about four decades; and Newark got its first new mayor in about 20 years in Cory Booker, a Yale University-trained lawyer.

Developers hope the administration's new blood will capitalize on Newark's existing assets. Stefan Pryor, who had been president of the Lower Manhattan Development Corp., which assisted in planning the rebuilding of Ground Zero, started work last week as Newark's first deputy mayor for economic development. He says the new administration will work to update the city's plans for development and zoning to foster a more cohesive approach.

A number of investors have moved ahead with their plans despite the city's challenges -- which sometimes include leery lenders concerned about financing the first developments of their kind in Newark for some time. In 1999, Cogswell Realty Group paid $2.2 million for the 1930s office tower at 1180 Raymond Blvd. which overlooks Military Park and is a short walk to Newark Penn Station, says Cogswell Chief Executive Arthur Stern. It took about six years to put together financing that allowed his company to proceed with transforming the building into a high-end rental complex with a doorman, health club and bowling alley.

Since opening this summer the building has rented about 65 units. Mr. Stern, who expects to have the building occupied by next summer, is confident that the building and the city are poised to realize their potential. "It's increasingly become very difficult to find an affordable place to live in New York City and for a lot of these people, Newark's the answer," says Mr. Stern. "Newark fell further down and is taking a while to come back but, because of its location, our view is it can't miss."

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