When it comes to Real Estate Investing. Downtown Newark, NJ may not even be on the shortlist. Historically it has suffered from a very bad image, population shrinkage, and a dramatic shift in business focus. Today we will separate the facts from the fiction and provide real figures and stats on the Downtown Newark market and how it has changed over the decades.
History in Brief
Newark has long been the largest city in New Jersey, it was formed in 1666 and has long been the center of manufacturing, shipping, and business. It boomed from 1800 on the back of the nation’s leather supply until its decline post world war two when it was rocked by riots and suffered population loss. It has suffered markedly as America moved from being one of the largest global manufacturers to a service-based economy.
In recent decades the population of Newark has been on a steady rise, along with incomes, as it has changed from a blue-collar mecca to a white-collar hub, but this has come with pain and cost.
The demographic is changing from work-class employed in manufacturing and shipping to working in the growing Downtown area with technology, finance, insurance, and education-based roles.
More than 100,000 people commute to Newark every day (1) making it the state’s largest employer with massive growth in service-based jobs.
In 2021 Newark is the third biggest insurance center in America. Some of the biggest employers in Newark downtown are Prudential Financial (insurance) Audible (amazon) NJIT(university) and NJ Transport (Transport). In the downtown sub-market, 71.75% (2) employees are white collar.
Not only is this shift to service-based roles future-proofing jobs, it also increases income and many of these large companies have great “Live Local” programs which provide up to $3,000 (2) for employers to live closer to work.
Population and Income
The Downtown area is a different sub-market to the other wards of Newark. It’s growing at a faster rate and has a high average income of $47,412.00 (3) it’s population is growing at a rate of 1.3% (4) annually. In recent years it has seen major development of residential buildings to encourage this shift.
Student accommodation is a big business, 44% of students live 10 mins from campus (5) and Newark is a growing university town. It is home to the NJIT, Rutgers, Pillar, and Berkeley college all have campuses within the Newark city limit. They contribute to the 50,000 + student population.
Tax incentive to build
Newark is the Home of many American-based corporations, a growing insurance company base, and as 2018 has seemed to turn the corner with residential projects. It is estimated that as high as 20% (7) of construction project costs are being covered by the local government.
Downtown Newark is a neighborhood in transition but the addition of a full-service wholefood supermarket, the continued shift to more technology, financial and service jobs, and further incentives will all surely help.