MAG Partners closes transaction to develop mixed-income residential building

Manhattan, NY MAG Partners, the woman-owned development firm, closed on the leasehold acquisition for 335 Eighth Ave. with Penn South, an affordable housing cooperative located in Chelsea. 335 Eighth Ave. will be a mixed-income apartment building with ground floor commercial space, including a grocery store.  

The deal represents a second closing for the partnership between MAG Partners and Safanad, a real estate private equity firm. In 2020 the two firms announced their JV to pursue New York metropolitan area real estate together. They now have nearly 700 units of housing in development in Manhattan. 

The new 188-unit building will be developed under the Affordable NY Program with 30% of its units reserved for low-and-middle income New Yorkers.  The team secured the necessary footing for program inclusion in early 2022 and demolition will begin in the first quarter, 2023 followed by construction in the third quarter, 2023. The contextual 200,000 s/f, seven-story building is designed by local architects COOKFOX.

“We are proud to reach this important project milestone with Penn South and look forward to starting a new mixed-income residential building that will contribute to the coop’s beautiful campus and provide critical income to its mission,” said MaryAnne Gilmartin, founder and CEO of MAG Partners.

“Our close on the 8^th Ave transaction demonstrates our continued faith in the strength of the New York City multifamily rental market; the project builds on our deep and successful partnership with MAG Partners, as already exhibited by our joint ground-up development project on 28^th St.,” said Andrew Trickett, partner and head of investments at Safanad.

Penn South, also known as Mutual Redevelopment Houses, initiated a process to identify and select a development partner to transform a corner parcel with a commercial building that required significant repairs. The ground lease payments will support Penn South’s core objective to maintain long-term affordability and quality of life for its nearly 5,000 residents.  Washington Sq. Partners represented Mutual in the transaction.

“The revenue generated from this new partnership with MAG Partners will provide critical funds that permit our co-op to pay for capital improvements around our aging campus, keep monthly maintenance charges affordable, and support vital services and care that our residents depend on,” said board president Ambur Nicosia. 

“The coop was faced with a decision to make, after a thorough assessment from our professional engineers and real estate consultants: either we seek additional very costly loans in order to address major capital repairs to this two-story aging commercial building or enter into a long-term ground lease with a responsible developer who will demolish the existing building and build an affordable quality housing building that will blend into the fabric of the community and guarantee our limited equity coop cash flow for many years to come,” said general manager Ryan Dziedziech.

Susi Yu and Jeff Rosen led the deal for the MAG Partners team. The parties were represented by Joshua Stein and Alexa Klein of Joshua Stein PLLC and Dena Cohen and Francesca Venezia of Herrick, Feinstein LLP.