MAG Partners celebrates topping out of first NYC project; COOKFOX-designed rental to bring 480 mixed-income apts to Chelsea

Just south of the slow-as-molasses and desperately needed metamorphosis of Penn Station, the area once known as the ‘Fur District’ is transforming into a vibrant mixed-use community. 2021 began with the opening of Moynihan Train Hall, the transformation of Farley Post Office into an airy, welcoming train station. Plans are moving forward for the Penn District, the transformation of the area around the much-maligned Penn Station that will also bring aesthetic and infrastructure improvements to the station itself.

A few blocks south, construction has topped out at 235 feet high and 22 stories at 241 West 28th Street, a 400,000-square-foot through-block development between Seventh and Eighth Avenues. MaryAnne Gilmartin, Jeff Rosen, and Susi Yu of developer MAG Partners, as well as Rick Cook and Brandon Specketer of designer COOKFOX Architects, were on hand to mark this milestone, which puts the building well on its way towards its target completion of late 2022.

The project will comprise two 22-story towers, individually fronting West 28th and West 29th Streets, and a private courtyard in between. There will be approximately 8,500 square feet of retail space on the ground floor, and apartments on all floors above. As part of the Affordable NY program, 30 percent of the units (or approximately 144) will be permanently affordable to low- and middle-income New Yorkers. Permits filed in September 2019 show that amenities will include a children’s playroom, pet spa, fitness rooms, bike room, lounge, and pool.The project is targeting LEED Silver certification, and COOKFOX is well known for its work relating to sustainability and occupant wellness. Released renderings showing details of 214 West 28th Street’s facade show the building will have a planted canopy above the entrance, beautifully-articulated brickwork, and deeply-inset windows with chamfered surrounds to augment views. Additional outdoor offerings will include a central courtyard and garden, as well as a series of terraces and rooftop gardens with views of Midtown, Lower Manhattan, and the Hudson River. Examples of the firm’s commitment to biophilic design include 550 Vanderbilt Avenue, 150 Charles Street, Google’s expansion in Hudson Square, and a nearby condo development at 39 West 23rd Street.

“We have never met a surface we haven’t wanted to plant green” — Brandon Specketer, COOKFOX

The new building is being developed in a joint venture between MAG Partners (led by Ms. Gilmartin), Safanad, Atalaya Capital Management and Qualitas. The lot was previously owned by major parking landlord Edison Properties and was acquired by MAG Partners in December 2018 by way of a 99-year ground lease.

The property had long been slated for development, and a 2011 rezoning allowed for new residential uses to breathe new life into the shrinking Fur District. Fast-forward nearly a decade later, the acquisition of a $173 million loan from Madison Realty Capital allowed construction to proceed.

“As true believers in the future of New York City, we are thrilled to be able to begin construction on this innovative project that will bring mixed-income housing and hundreds of jobs at a critical time for the City.” — MaryAnne Gilmartin, Founder and CEO of MAG Partners

“This marquee 480-unit multifamily rental building, located within a few blocks of Hudson Yards and other prominent tech tenant expansions on the west side, will be one of the only new multifamily rental projects built in Manhattan in the next few years,” said Josh Zegen, Co-Founder and Managing Principal of Madison Realty Capital. “We were pleased to fill a void which would customarily be financed by conventional banks, and provide our flexibility, certainty, and conviction.”

241 West 28th Street is taking shape in what is rapidly becoming a central live-work-play community. The site is a few doors west from Maverick Chelsea, an eye-catching new building where current availabilities start at $1.5 million. Around the corner, MAG Partners and COOKFOX have teamed up again to transform 335 Eighth Avenue, an affordable housing cooperative, into a 200-unit building with commercial space, including a grocery store.

These projects will provide much-needed affordable and market-rate apartments to a central Manhattan location within walking to distance to thousands of office tenants in Midtown, the Garment District, Chelsea, and Hudson Yards. Facebook is set to occupy the office space in the James A. Farley Building, and industry giants like Apple, Google, and Amazon are among the firms embarking on expansions nearby. The area has also seen a commercial building boom over the past few years with developers undaunted by the pandemic and growing work-from home arrangements. Around this building alone, Fashion Institute of Technology is planning a multi-layered glass academic building designed by SHoP Architects across the street, and construction is winding down on 28&7, a sleek new commercial tower designed by Skidmore Owings & Merrill.

“As a firm, we continue to believe in the future of cities as places where the world’s most talented and creative minds congregate – we expect New York City to continue to lead the way on that front and the Chelsea neighborhood to strengthen its attributes as a highly desirable place to live, work and play. We are excited to commence building this project.” — Mark Fischer, Global Head of Real Estate at Qualitas

The site is also a stone’s throw from the new Penn District plan set to transform the decrepit Penn Station and the surrounding area. Andrew Cuomo called for a new business district of 10 skyscrapers to be built, and for using the money from those buildings to finance much-needed infrastructure upgrades. More recently, Governor Hochul has called for revisions of the plan, saying, “It’s time for a Penn Station that meets the needs of New Yorkers.” Her vision calls for the same number of buildings, but not as dizzyingly high as the supertalls previously proposed. It also calls for 540 permanently affordable housing units among the 1,800 new ones proposed in the plan, as well as eight acres of public space and a plaza that would limit car traffic.

It is unclear how Madison Square Garden would fit into all this. The arena was granted a 10-year permit in 2013 so the owners could find a new home; eight years later, ownership has not revealed plans for that, but did announce that they had signed a lease for a 428,000-square-foot corporate headquarters at Penn 2, one of the new office towers in the Penn District. Some critics say that moving Madison Square Garden would let natural light into Penn Station and improve conditions from a safety standpoint. Governor Hochul’s plan calls for keeping Madison Square Garden where it is, but requiring the Hulu Theater to be demolished to accommodate a grand entrance to Penn Station.

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Q&A with MAG Partners’ head of development Susi Yu

PincusCo connected with MAG Partners’ head of development, Susi Yu, to discuss MAG’s topping out at 241 West 28th Street, their recent new development plans just around the corner at 335 Eighth Avenue, and more.

MAG Partners is a woman-owned, urban real estate company whose principals have designed, built, and operated over seven million square feet of office, residential and mixed-use projects, including over 2,000 units of housing. On December 7, the firm topped out their project at 241 West 28th Street and provided PincusCo Media with the following photos of the event.

This interview is part of a new series of Q&As with industry thought leaders who invest, develop, broker, or provide professional advice related to New York City real estate.

Check out PincusCo’s recent interview with Grubb Properties’ vice president of development, Paul O’Shaughnessy.

Atticus: Just this week MAG topped out their project at 241 West 28th Street, could you tell us a bit about the development?

Susi: This is our first ground-up development. It is a 480-unit multifamily rental unit project and 30 percent of the units are affordable. We closed on the site in 2019 and started working with COOKFOX as the architect. We’ve been working on this now for close to two and a half years. We closed on the project financing in November of 2020 and started the foundation shortly thereafter and topped out December 7th. We will bring the project online in January of 2023, and are currently on schedule to meet those deadlines, so we are super excited.

Were there any unexpected elements that facilitated development, or others that slowed it down?

COVID was a huge curveball. We had to close on our construction financing in order to start construction and the pandemic made us take a different route to get that done. Before the shutdown we were speaking to traditional banks about getting a construction loan and after the shutdown we had to pivot and look at different sources of capital. It took us about four or five months to find the right partner, which ended up being Madison Realty. Interestingly, because of the pandemic we were able to buy the project with favorable economics. We had awarded 60 percent of the project when the market was very competitive and relied on local sourcing to avoid supply chain issues.

Earlier this fall MAG filed plans for another Chelsea project, a 128-unit mixed-use development at 335 Eighth Avenue, could you talk a little about the project and how the deal with Penn South to develop it came to be?

MAG Partners was fortunate to be on a list of selected developers that Penn South asked for proposals from in early 2020. We submitted a residential building, designed very contextually by COOKFOX, and at the end of 2020 we were selected. We worked through the business issues with Penn South and executed the LOI earlier this year and we are now working on the ground lease and designing the building. Penn South is one of the few thriving NORCs (naturally occurring retirement communities) in NYC and it is an affordable cooperative housing with a long list of people wanting to live in the development. The revenue produced by commercial buildings, including our site, offsets the operating expenses and is critical for Penn South’s ability to keep the co-ops affordable.

According to an analysis of DOB filings since the start of 2018, Chelsea was among the most active neighborhoods in Manhattan for new development both in terms of number of new building plans filed and total dwelling units filed for. What has made this neighborhood so appealing for new development in recent years?

I think it depends on what your boundaries are of Chelsea. A lot of people push it far west, more than I would, and much further north than I would. But what I think is interesting about Chelsea is there are very few sites and I think a lot of the projects that were filed since 2018 were probably for condominiums, not multifamily rentals, given where the market was in terms of land value, like the Edison projects sold to HFZ. Companies like Facebook relocating to, I’d call it Penn Station west area, and Google literally taking over Chelsea Market, I think it makes the existing neighborhood fabric of Chelsea that much more attractive to potential tenants or condo buyers. The neighborhood also has fairly contextual zoning, so you can’t really build a tall building. So it’s an interesting neighborhood with very few available sites and then what you build has to fit in the zoning of the neighborhood. You can also walk everywhere, to Union Square, Madison Square, Meatpacking, Hudson Square, it’s very accessible but still feels like a neighborhood.

MAG’s website states that construction on the new project at 335 Eighth Avenue is expected to begin in 2022, do you have an estimated completion date?

Likely the beginning of 2026 or the end of 2025.

Do you have any other projects lined up? How are factors such as Covid-19 and the expiration of 421-a impacting development decisions?

We have another residential project that we’re working on to beat the 421-a deadline, it’s a 200-unit, multifamily rental building with 30 percent affordable. We also have a boutique office building that we have been working on for the past year and a half or so. It is about 200,000 square feet and it’s in a very strong location. We are also looking at other projects outside of New York City in order to increase our footprint. New York City is becoming a harder and harder place to develop so we are looking elsewhere, some are pretty large scale projects.

Looking even further into the future, what is the biggest change you anticipate in NYC’s development market by 2031?

I think what you’re going to see is a market where there is a dearth of rental housing because of expiring 421-a. You’re going to start to see a shortage of housing. I hope the city really focuses on how to deal with the homeless situation, in terms of providing supportive housing for the homeless population. As the city gets wealthier and wealthier, those at the bottom of the economic ladder continue to suffer because of the lack of good and safe affordable housing.

MAG Partners is a woman-owned firm, do you want to speak about the significance of that?

70 percent of our firm is made up by women, which we are very proud of. We are very committed to diversity and it is something we practice not just with our team but also with other partners we deal with. For example, we demand with our consultants that there are women who are interfacing with ownership representing their firms. You know they’re at the office doing all the work but they’re not getting the opportunity to interface with ownership or developers, and that’s how you grow business, so that is something that we do demand of our consultants. It is the same with our equity partners, our LP partner out of Australia, Qualitas, is an investment firm that was started by a woman named Carol Schwartz. We want to make sure that everyone who we work with understands what our goals and values are. That’s something that is really important for us.

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MAG tops out Chelsea tower

MAG Partners has topped out construction on a 480-unit rental residential building at 241 West 28th Street in Chelsea. The development is expected to be complete in late 2022.

The first development project of MAG Partners, founded by MaryAnne Gilmartin, is being designed by celebrated architects COOKFOX Architects. The building will include approximately 8,000 s/f of ground floor retail. 

Developed under the Affordable NY program, 30 percent of the project’s units are reserved for low- and middle-income New Yorkers. Urban Atelier Group is the construction manager for the development.

The exterior of the building is designed with contextual masonry inspired by the rich historic architectural fabric of the neighborhood, while the residences will incorporate biophilic design strategies that connect its residents to nature. A landscaped canopy will welcome residents at the 28th street entrance and a central courtyard and garden will unite the amenities and lobby areas. Above, alternating piers of hand-laid, angled brick and expansive windows allow light and shadow to dance across the façade. A series of outdoor terraces offer residents rooftop gardens and panoramic views of midtown, downtown, and the Hudson River.

The project is a joint venture between MAG Partners, Safanad, Atalaya Capital Management and Qualitas.

MAG Partners previously announced that it has secured a $173 million construction loan from Madison Realty Capital for the project.

Pictured top are project team members MaryAnne Gilmartin, Jeff Rosen and Susi Yu of MAG Partners, Rick Cook and Brandon Specketer of COOKFOX, Andy D’Amico, James Palace, and Tom Alaimo of Urban Atelier Group, and Jon Mechanic of Fried Frank.

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