Private Lender Essex County, NJ: Can East Orange Mirror the Development Success of Newark?

/Private Lender Essex County, NJ: Can East Orange Mirror the Development Success of Newark?

Essex County, NJ: Can East Orange Mirror the Development Success of Newark?

By |2018-09-26T01:48:52+00:00September 26th, 2018|Market Trends, Private Lender|0 Comments

The transformation of East Orange starts at 461 Dr. Martin Luther King Jr. Boulevard.

In 2010 the East Orange population consisted of 64,270 people, according to the U.S. Census Bureau. In 2016, Data USA recorded the East Orange median household income at $38,403, less than the U.S. 2016 median annual income of $55,322. 

While many remain skeptical about East Orange’s economic progress, Aryming Asset Funding was not discouraged. The boutique real estate lending firm loaned 461 East Orange Associates $2 million for the development of 461 Dr. Martin Luther King Jr. Boulevard. A Rite Aid drugstore currently occupies the single-story retail building on the property.

 Newark’s Rise to Economic Prominence To understand the potential of East Orange, we need to look at Newark, its Essex County neighbor, and the largest city in New Jersey.

After the end of World War II, low-interest mortgage rates, educational assistance and the G.I.Bill incentivized an increasing number of Newark residents to move to the suburbs. During this transitional phase, blacks were moving into the Newark area; they often faced job, housing and education discrimination.

After years of frustration over discrimination and economic inequality, an event on July 12, 1967, finally triggered action from the black community.  John Smith, a black cab driver, was pulled over at night. He was beaten and detained by two white police officers for a minor traffic infraction.

When word of the incident spread, a crowd gathered outside the 4th Precinct, with no intention of backing down. Violence escalated into five days of rioting, even with the governor’s decision to bring in the National Guard. Twenty-six people died.  The incident resulted in negative national headlines that Newark has struggled to overcome.

In recent years, however, Newark has been in the spotlight for progress and development. Even Vogue has suggested Newark as a destination to visit. Newark has dropped in crime within the last 50 years, and according to Newark’s Department of Economic and Housing Development, investors have poured an estimated $1.7 billion into residential, commercial and industrial projects. Businesses such as Whole Foods have opened their doors there, and the New Jersey Institute of Technology, Rutgers University campuses and Newark Liberty International Airport are solid fixtures in the city.

Newark is slowly transforming into a tech-driven hub. The city is home to Audible and city-based venture capital fund Newark Venture Partners. Newark was recognized as one of the top 20 finalists to be Amazon’s “HQ2” project location. In 2017, published an article that honored Newark as No. 13 on the list of top 50 U.S. markets for attracting and growing tech talent. The report qualified honored cities based on growth in offices, apartment rentals and tech jobs.

Within the last couple of years, Newark has been focused on real estate development projects. The most prominent Newark development at the moment is the One Theater Square project, expected to open this year. The transformation of the NJPAC parking lot into One Theater Square was inspired by the Brooklyn Arts District, specifically the Brooklyn Academy of Music in Fort Greene. Another distinguishable project is the redevelopment of Bears & Eagles Riverfront Stadium. As a result of all this development, Moody’s Investors Service revised the outlook of Newark from negative to positive. What does this mean for Newark? Their low investment grade rating may receive an upgrade.

Photo of a boarded up, two-story house in East Orange NJ

Can the Same Be Expected for East Orange?

We can expect to see similar developmental changes occur in East Orange. East Orange Mayor Lester Taylor, III, was quoted in a March 24, 2014, Ebony magazine article as saying: “East Orange is a diamond in the rough. We are situated by major highways and we enjoy the luxury of an easy commute to and from New York Penn Station in 26 minutes. Some of the suburban cities and towns on the east coast have water, but East Orange has transportation.

He goes on to say: “There is no reason why East Orange can’t do [what Jersey City and Hoboken] have done.

The New Jersey Transit’s East Orange and Brick Church stations are exemplary projects, both built as a result of growing population. Both the stations connect to Morristown Line and the Gladstone Branch, which connect to Hoboken and Manhattan. Nearly 60,000 a week use the Hoboken terminal.

In early 2018, a new high-rise development plan for South Harrison Street was proposed.

Armying Sees Opportunities

Armying recognized the opportunities and economic revitalization in East Orange and is establishing itself as a pioneer in Essex County.

The company has realized the need for refinancing to transform the community.

Aryming has taken a massive but calculated risk with 461 East Orange Associates’ project and vision. This project is the first step in its due diligence to make a difference in the East Orange community and encourages others to invest in the development.

Growth and expansion are the inevitable effects of a booming economy. The transition for younger generations to discover and live in new places is also a condition of economic changes.  Cities with lots of urban amenities grow faster.

Transportation is a strong factor in creating real estate hot spots. New York City is a prime example. Its transportation is hailed as the biggest in the world. This was one of the many reasons the city has flourished. It was even a factor for the United Nations to base their headquarters in the city.

Proximity to transit hubs is a factor for real estate hot spots. Examples of such effects are exemplified with properties near NYC’s newly minted Second Avenue subway, where properties around the area have become high-stake commodities. San Francisco, Washington, D.C., Jersey City Journal Square and Newark also bear strong similarities to Second Avenue’s real estate boom.

A Dec. 18, 2015, Washington Post article noted that people who live near metro stops have higher income in common. According to the report, the percentage of Washington, D.C., workers with six-figure incomes who live near transit has risen from about 18 to 23 percent.

Another common attribute was a higher educated set of workers.  According to the same WaPo article, “The share of highly educated workers near transit is similarly soaring. In the latest data, three-quarters of all workers within half a mile of a metro stop in the city had at least a bachelor’s degree, a stunningly high number.”

The report concluded by acknowledging the role of mixed-use development that combines high-rise apartments with retail and bars below: “That kind of mixed-use development along transit corridors is widely popular now not just among millennial workers, but also among the urban planners who want to make it possible for more of us to live without a car and within easy access to jobs.”

With all these indicators in place, the propensity for growth in East Orange now seems inevitable.

The city continues to show gradual growth, with unemployment rates decreasing and job growth increasing according to 2018 Local Area Unemployment Statistics. The Essex County unemployment rate in April 2018 was 5.1 percent, while the national rate was 3.9 percent.

Business and residential growth depends on the potential that investors see in East Orange’s elements and parameters. As the region presents slow but steady economic growth, increased property market value becomes more apparent. This opens the doors for future investors to participate in the growth of Essex County.

By |2018-09-26T01:48:52+00:00September 26th, 2018|Market Trends, Private Lender|0 Comments

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