Urban redevelopment is a familiar story in metros across the country. In the New York City metropolitan area alone, submarkets in parts of Brooklyn, the Bronx, Jersey City and Hoboken (just to name a few) are many years into facelifts that encompass thousands of new apartment units mixed with office, retail and entertainment uses that create a live-work-play environment.

Newark, N.J., has struggled in recent decades to attract businesses and residents, with a city population of 480,000 at its peak, and just 280,000 today. Much of the commercial real estate in the city has aged poorly, and office vacancies reached 24 percent in 2013, according to JLL.

Today, cranes are returning to the Newark skyline, with $1 billion of projects under
way and another $4 billion in the pipeline.

Newark’s pitch is simple: The city is a train hub with a short ride to Manhattan; it has its own downtown office market led by major corporations such as Prudential Insurance; it has an educated workforce with 60,000 students enrolled in city colleges and universities; growing access to entertainment and retail; and — maybe most importantly — it remains much more affordable than peer cities such as Jersey City and Hoboken.

For real estate investors, the city’s late entry into the revitalization game means land and building prices have not skyrocketed, creating the opportunity for value-add deals, said Carmelo Garcia, executive vice president and chief real estate officer for the Newark Community Economic Development Corp., which is overseeing the plan with city officials and private developers.

The revitalization was set in motion in 2011 when Prudential, which has been headquartered in Newark for more than a century, began planning a new headquarters. The 740,000-square-foot, 20-story building on Broad Street, which cost $444 million and was funded in part with tax incentives, opened in 2015. Prudential’s commitment to stay in the city was a signal to other companies and helped provide the impetus for ambitious plans to redevelop the downtown area.

Newark’s redevelopment is in the early stages, and it remains to be seen whether the city will appeal to enough businesses and residents to become another Jersey City. However, the development that has taken place and the plans for the next few years have created a new buzz surrounding a once-wounded city.

Paul Fiorilla is associate director of research at Yardi Matrix.