By Joshua Burd
As Miles Berger knows all too well, transit access and proximity to Manhattan have been longtime drivers of Newark’s office market.
He also knows that those benefits play a major role in the city’s lesser-known tourism sector. It’s why Berger is taking a major step to upgrade his hospitality portfolio in downtown Newark: a gut renovation of a 90-year-old hotel that will result in a new state-of-the-art property near the city’s Military Park.
Slated to be completed this fall, the property will reopen under the TRYP by Wyndham banner, delivering 101 guest rooms to a burgeoning section of downtown Newark. And it will join what is still only a small group of hotels in the city’s main commercial district, including the nearby Best Western Robert Treat Hotel that is also owned by Berger’s firm.
“A lot of what’s driving the Newark market is New York overflow,” said Berger, CEO of the Berger Organization, noting that the city appeals to cost-conscious travelers who can still get into Manhattan by train within 20 minutes.
The hotel business in New Jersey’s largest city is relatively healthy and growing. Occupancy has averaged 76.7 percent over the past 12 months, according to the Greater Newark Convention and Visitors Bureau, representing an increase of 1.8 percent year-over-year. But Berger said the growth potential is especially high in the downtown due to limited supply. Prior to the opening of a new Courtyard by Marriott near the Prudential Center in 2012, the area had not seen a new hotel open in 40 years.
Berger’s project calls for revitalizing the former Carlton Hotel, a seven-story, 150-key property built in the 1920s that his firm acquired more than 35 years ago. It ceased operations at the building in 2013, he said, noting that “it needed to be totally redone.”
TRYP is a mid-priced, relatively new brand for the U.S. hotel market that offers an urban, European-style concept and caters to families. Berger, who had an existing relationship with Wyndham through another one of the firm’s properties, the Ramada in Jersey City, first saw the TRYP concept in Manhattan about two years ago. At the time, he said he was drawn to the hotel’s open floorplan and a décor that highlights other cities where the brand has spread, including Madrid, Paris and Lisbon.
“I was just intrigued with the brand,” Berger said. “And even though it’s new and you sort of take a risk with something new, I think it’s going to take off and be very good.”
The Newark project, which is subject to the guidelines and restrictions that come with a historic renovation, will end up with nearly 50 fewer guest rooms as part of the modernization. Many of those rooms will cater to families, with features such as bunk beds that fold down from a wall and allow parents to share a room with their small children.
Berger said the hotel will also include specialty “fitness rooms” that have treadmills or exercise bikes in addition to the normal guestroom amenities. Plans for the overall property call for a restaurant, fitness center and business center.
When the building opens in October, it will rejoin the cluster of Berger-owned buildings alongside Military Park, including four office properties. The portfolio also includes the Robert Treat Hotel, a 176-room property that has allowed the firm to become well-versed in the city’s hospitality market over the past three decades.
It’s one reason why Berger, who isn’t worried about oversupplying the neighborhood, is confident there is unmet demand for modern hotel rooms. Along with tourism, hotel occupancy benefits from the presence of nearby institutions such as Rutgers University and the New Jersey Institute of Technology, plus corporate anchors such as Prudential Financial and Public Service Enterprise Group.
And he said those opportunities only stand to grow with the expansion of the Greater Newark Convention and Visitors Bureau. The destination marketing group, of which Berger is a board member, has been growing over the past three years with the help of a tourism improvement district and a hotel tax that is assessed on room fees.
The organization also recently appointed a new executive director and opened a new visitor center within Berger’s 58 Park Place building, providing a guidepost for visitors to the city. And the organization is busy touting all there is to do in Newark and everything in the pipeline, from the nation’s largest collection of cherry blossoms to the planned Grammy museum exhibit at the Prudential Center.
“That’s one of the things we’ll be working on in the future to make the public aware — even the arriving public (at the airport),” Berger said. “A certain percentage of people come to New York, they land at Newark airport and they don’t know where they’re going, so you could catch them at the airport. They’re arrivals without reservations.”
The view from Miles Berger’s office certainly has changed in recent years.
Located inside Robert Treat Center, the window nearest Berger’s desk overlooks not only a refurbished Military Park, but a stretch on the other side of the park that has undergone nothing short of a transformation. What were vacant lots and dilapidated, boarded-up buildings as recently as 2013 have been replaced by Prudential’s sparkling new 44-story office tower, the rehabilitated Hahne & Co. building anchored by Whole Foods and other new retailers such as Starbucks and Nike.
“What’s happening in this area is remarkable,” Berger said. “We haven’t seen anything like it in 50 or 60 years.”
There’s no understating the impact of the neighborhood improvements as the Berger Organization proceeds with plans to open the new TRYP by Wyndham hotel this October. But Berger’s office buildings are also seeing the benefits. The 100,000-square-foot Robert Treat Center is 100 percent leased, while the 250,000-square-foot Military Park Building is also approaching full occupancy.
“Whether we’re talking about office tenants or guests, it doesn’t matter,” Berger said. “For office tenants who are here five days a week or sometimes six days a week, they have now a quality of life on the street that prior to this they did not have.”
That’s not to mention One Theater Square, Dranoff Properties’ long-awaited, 22-story luxury residential tower near the New Jersey Performing Arts Center. The $116 million project broke ground last fall just north of Berger’s Military Park holdings and is “coming up before our eyes now, so we know it’s real,” he said, adding that the 245-unit luxury apartment building will also “change the area.”
Berger is taking the opportunity to add to his company’s footprint in Newark. Early this year, the firm acquired the well-known, 450,000-square-foot office tower at 33 Washington St., which sits several blocks north alongside Washington Park.
Completed in 1970, the 18-story building was previously occupied entirely by Horizon Blue Cross Blue Shield of New Jersey and now has multiple tenants, including Audible and DHL. But the tower is still only about 20 percent leased, providing a major upside for Berger.
And while “there is work to be done” at the building, he is as bullish as ever on the Newark office market, between the improvements to the neighborhood and what he sees as growing demand. For instance, he pointed to the interest from new types of tenants such as 1the European firms that have taken space at his buildings.
“The fact that they would even come and look was surprising about four or five years ago,” Berger said. “So there’s a whole change as to how people see Newark.”