When people think of Newark, New Jersey it doesn’t often bring back sweet memories. The most populous city in the state of New Jersey is most often associated with urban blight following riots that occurred back in 1967. In the span of a few decades, New Jersey’s premier city went from an economic driver to a struggling urban area. Nonetheless, this city of over 280,000 continued to be one of the country’s major air, shipping, and rail hubs, and today with billions of dollars in development projects underway Newark is staging a comeback.
The Patch reports that despite the COVID pandemic, the ball is still rolling for several real estate projects in Newark neighborhoods that deserve a breath of fresh air. There are neighborhoods with high rates of foreclosures and many underwater properties worth less than what’s owed on them. There are also abandoned and deteriorated properties, vacant lots, and few affordable housing choices. Nonetheless, The New York Times reports that just fifteen miles from the heart of Manhattan, Newark’s downtown commercial district has successfully lured housing developers, a Nike factory store, a Whole Foods Market, and the corporate headquarters for Audible, Amazon’s audiobook and podcast service. The New York Times also reports that in the last five years, more than 3,500 units of affordable housing have been built or are underway, much of it outside downtown, city records show. Newark sold almost double the number of abandoned parcels at auction in 2020 as it did in 2019, and the average price of land — none of it downtown — was about 30 percent higher. Between 2015 and 2020, major crimes, including murder, robbery, and assault, plummeted by 40 percent. Once the governor made construction an essential business, developers did not hesitate to get back to business. Even during a pandemic, Newark pushed forward.
Newark has long been an area that Sharestates has viewed as ripe for growth and development, and the company has formed many strong relationships with developers in this market as a result. Over the past few months, we have funded developers dedicated to rehabbing the city of Newark one property at a time.
Here are just a few projects that were recently completed or currently in the works. The first project was a Fix and Flip loan of a multifamily property. The Borrower acquired the property to add value by rehabilitation. Rehab is now complete, and the units are now being leased out to tenants. Upgrades to the property included new kitchens for all 6 units, bathroom remodels for all 6 units, a new HVAC system, paint throughout, and new flooring. Here are some before and after images of the completed project.
Before: Fix & Flip Loan
After: Fix & Flip Loan
- Loan amount – $508,000
- Loan Purpose – Construction
- Property Type – Multifamily
- LTV – 80%
- Rehab Budget – $129,000
The next project we recently funded has a total of 20 units. Here are some images of the properties in the portfolio.
Rental Portfolio Loan Properties:
- Loan amount – $2,577,000
- Loan Purpose – Cash-out
- Property Type – Residential
- LTV – 70%
To learn more about Sharestates or inquire about funding your next real estate project please click below.