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From left: Vaughn Crowe, managing partner of Newark Venture Partners; John Saraceno, co-founder and managing principal of Onyx Equities; Jon Dario, CEO of Edison Properties; Melissa Strickland, managing director of HLW’s New Jersey office; Aisha Glover, vice president of urban innovation for Audible’s Global Center for Urban Development; Duncan Turner, general partner with SOSV and global managing director with HAX; and Anton Vincent, president of Mars Wrigley North America, were among the panelists at the Newark Summit on Dec. 4. — Photo by William House/Courtesy: Genova Burns
By Joshua Burd
Despite uncertainty about the broader office market, the local landscape in Newark is changing for the better, as corporations place a greater premium on culture, experiences and other assets that have long existed in the city alongside its connectivity and access to talent.
That was a key takeaway this week from a panel of owners and tenants at the Newark Summit, a daylong program that drew more than 1,000 attendees to Edison Properties’ Ironside Newark complex. The city is now a place where tenants want to be rather than need to be, they said, as they explored how to build on the momentum of several major deals in recent years.
“Mars Wrigley didn’t need to be here, but they came here, and I think that was a huge transition and transformation,” said Onyx Equities’ John Saraceno, a landlord at the neighboring Gateway complex, referring to the candy giant’s 110,000-square-foot lease at Ironside in 2018.
“And we’ve built on that with WebMD and other tenants that have come into the Gateway that historically I don’t think would have looked at Newark as an opportunity.”
He also pointed to the most recent deal at Ironside, a high-profile commitment by global consulting firm McKinsey & Co.
“We see it, even today in a slowing economic cycle and with ‘office’ being a bad word in some levels of the capital markets, (with) the level of activity and interest in Newark from office tenants,” said Saraceno, a co-founder and managing principal of Onyx. “McKinsey is a huge get. … In the world that we live in, everybody wants McKinsey in their community.”
Hosted by roundtable&advisory, with Genova Burns LLC as its master sponsor, the Newark Summit convened a host of top business leaders and government officials on Monday for a series of presentations. That included a discussion on the office market, where panelists cited the impact of transformative, long-term investments by Newark’s largest corporate citizens, from Prudential Financial to Audible, which famously moved there from Wayne in 2007, as well as real estate players that have banked on the city’s potential to draw new companies.
Mars Wrigley is among the newer additions to Newark, having moved hundreds of workers from Hackettstown after also considering cities such as Chicago and Nashville.
“We source from all over the world, and we bring a lot of non-U.S. citizens through a lot of our North American operations,” said Anton Vincent, president of Mars Wrigley North America. “So it was important for us that we have a city that had magnetism, that had a forward-thinking political environment, that had other players that understood what building a region looked like, what it felt like and then (how to) collectively bring talent to the region to push the region forward as well.”
Maintaining that momentum has meant investing in the city’s existing building stock, said Melissa Strickland, managing director of HLW’s New Jersey office, who moderated the panel. She pointed to properties such as Gateway, where Onyx and its partners completed a $60 million overhaul after acquiring three of the four buildings at the 2.3 million-square foot complex. That drew a 99,000-square-foot commitment in 2021 by WebMD, the online health publisher, as well as a 407,000-square-foot deal this year for NJ Transit’s new headquarters.
At Ironside, Edison Properties spent roughly $80 million to restore and repurpose the historic warehouse across from Newark Penn Station, creating the 456,000-square-foot office and retail destination at 110 Edison Place. That has attracted Mars Wrigley and, more recently, McKinsey, which announced last month that it would it move some 700 employees to the property.
“They studied every single thing that you can imagine about the benefits of Newark, about the commutability, about the infrastructure,” said Aisha Glover, vice president of urban innovation for Audible’s Global Center for Urban Development, referring to McKinsey. “And I think it says a lot that they finally got there.”
Still, she said, the “big wins” are just one piece of the formula.
“Curating the city that we want in a way that’s equitable, that’s cultural and that builds off the existing infrastructure, I think ,is really key,” said Glover, a former economic development official in Newark. “So it has to be that mix of the big corporates and smaller startups and nonprofits. And we cannot overlook arts and artists and how much that contributes to a city, but specifically to Newark, and public spaces and parks.”
To that end, Audible has invested significantly in Harriet Tubman Park at the north end of Broad Street, formerly Washington Park, “because we know park revitalization sparks real estate development” and is an important amenity for employees, visitors and residents, she said. The audiobook giant also has a long history of incentivizing employees to live and eat locally, while it launched the early-stage venture capital fund and accelerator known as Newark Venture Partners.
Jon Dario, CEO of Edison Properties, said it was also crucial to add supporting retail amenities, but do so in a way that won’t “get too far out ahead” of new office users. Equally critical is listening to those tenants as they take an interest in Newark.
“The great companies bring the talent, and we all think we know what would be right for the city or for the offices,” Dario said, “but we should all take care to continue to listen to … what they want and need in order to have their people be happy here.”
Vaughn Crowe, managing partner of Newark Venture Partners, said future growth should come with an effort to “authentically brand the city for what it is and who it is becoming.”
“When I talk to founders about the prospect of moving to Newark and all that we have to offer, what a lot of these younger companies are looking for is authenticity,” Crowe said. “So the more that we can build a brand that supports the arts and the hard work that’s embedded in this culture, in our city, that’s embedded in our community … that will attract the younger generation to populate the residential housing that is absolutely needed to create an even more vibrant community.”
What’s old is new
For all the talk of Newark’s future, its past is equally appealing to many companies.
Just ask Duncan Turner of SOSV, a major venture capital firm, who was among the panelists at Monday’s Newark Summit. The executive said the city’s history and culture was a major draw for HAX, a technology accelerator run by the company, and a complement to the other assets that attracted it to the city.
The firm last year announced it would lease 35,000 square feet at a historic building at 707 Broad St.
“You’ve got industrial heritage here, so a lot of the companies we’re investing in can find real estate which is relevant to them as they start to build out some of the technologies that they’re developing,” said Turner, general partner with SOSV and global managing director with HAX. “And you’ve got access to capital across the whole eastern corridor — New York up to Boston.
“So for us, this is a really good place for companies not just to initially accelerate their technology, but to go in partnership with the universities here … You’ve got all that talent in that area, you’ve got access to capital and you’ve got real estate, which can facilitate that growth.”
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