The coming year at the Baltimore Peninsula will bring more feet on the street, a likely demolition of The Sun’s former headquarters and a new wave of hope at the large project for MaryAnne Gilmartin.
MaryAnne Gilmartin’s MAG Partners has purchased the $63.8 million leasehold for 335 Eighth Avenue from Penn South and plans to turn the site into a mixed-income apartment building.
MAG Partners signed a 99-year ground lease for the property — currently a retail building that formerly housed a Gristedes supermarket — in a joint venture with real estate equity firm Safanad. The JV plans to redevelop the building into 188 units of affordable housing with ground-floor commercial space, The Real Deal first reported.
The commercial building in Penn South, a 10-building mixed-income complex between West 23rd and West 29th streets that has faced financial woes, will be demolished while a new rental development will bring a grocery store to the area in the planned retail space, according to MAG Partners. Penn South tapped MAG Partners to lead the development last year.
“The co-op was faced with a decision to make, after a thorough assessment from our professional engineers and real estate consultants,” Ryan Dziedziech, general manager of Penn South, said in a statement. “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 co-op cash flow for many years to come.”
Gristedes, Midtown Tennis Club, Asylum Comedy Club and McDonald’s were previous tenants whose leases expired in the commercial building at the end of 2022, according to TRD.
Demolition of the existing structure will begin in the first quarter of this year followed by construction of a 200,000-square-foot, seven-story building designed by architectural firm Cookfox. Construction will start in the third quarter of 2023, according to MAG Partners.\
The sale of the leasehold will allow the co-op, officially known as Mutual Redevelopment Houses, to make capital improvements to remaining sections of the campus while keeping monthly maintenance fees low for shareholders and providing additional services to its estimated 5,000 residents. The deal could contribute as much as $750 million to the co-op over the length of the 99-year term, TRD reported.
“[We] look forward to starting a new mixed-income residential building that will contribute to the co-op’s beautiful campus and provide critical income to its mission,” Gilmartin said in a statement.
Mark Hallum can be reached at [email protected].
CFG Bank to Move to the South Baltimore Development in Q4 2023, Leasing 97,000 Square Feet of Office Space
Today, the Baltimore Peninsula development team, led by MAG Partners and MacFarlane Partners, and CFG Bank, announced that CFG Bank has signed a long-term lease for three floors, totaling 97,000 square feet of office space in 2455 House Street in Baltimore Peninsula. CFG Bank is the development’s latest confirmed commercial tenant, signing a 15-year lease at the 235-acre mixed-use development. 2455 House Street will serve as the headquarters for CFG Bank, as well as Capital Funding Group and the Jack and Nancy Dwyer Workforce Development Center, Inc.
The lease signing comes as the development’s first phase of vertical construction nears completion, with over 1.1 million square feet of new office, retail, and mixed-income residential opening in 2023. It is also the first commercial lease signing since the project rebranded in November 2022 to Baltimore Peninsula and is part of the larger effort to realize the development as a vibrant mixed-income residential neighborhood and thriving business district, supported by waterfront events and activities, new restaurants and social destinations that bring opportunity and strengthen the spirit of Baltimore.
Along with MAG Partners, CFG Bank is working with NewGround to create its one-of-a-kind headquarters. The office spaces will feature various indoor and outdoor collaboration areas with an employee lounge totaling 5,000 square feet, a rooftop community space, a library area, robust kitchens, an indoor sports simulator, and more.
“The partnership with CFG Bank represents our shared values and commitment to fostering a strong, inclusive community. It speaks volumes that a company like CFG Bank, a pillar of the Baltimore business community, has selected Baltimore Peninsula for its future home,” said Kevin Plank, Principal and CEO of Sagamore Ventures. “I am incredibly proud to welcome CFG Bank and look forward to working together to build on our vision of impact at Baltimore Peninsula.”
“We are excited to continue to welcome new tenants to Baltimore Peninsula, especially those like CFG Bank who have strong, established roots within the broader Baltimore community,” said Michael Lohr, Managing Director, Goldman Sachs Asset Management. “This lease represents another key milestone toward our broader revitalization efforts in South Baltimore, which seeks to engage the community through job creation and workforce development, in addition to providing access to new attractions and events.”
“Our lease with CFG Bank marks the beginning of an exciting partnership for Baltimore Peninsula, as the Baltimore-based institution grows its workforce in and for the city. With buy-in from partners such as CFG, we are building a place where people want to live and work,” said MaryAnne Gilmartin, Founder and CEO of MAG Partners. “We have incredible momentum and interest from potential tenants in Baltimore and around the country and expect to have a number of leases to announce in the coming months as we move closer to construction completion for the first phase of the project.”
“We’re thrilled to be moving our headquarters to Baltimore Peninsula. As our businesses continued to grow, we were in search of a new location that could accommodate our current and future expansion, provide an environment to foster our team’s entrepreneurial spirit, and support the reinvigoration of Baltimore,” said CFG Bank CEO & President Bill Wiedel. “As we design and build our new headquarters, we are creating a truly unique space where all our employees will thrive and work together, grow, and achieve our own goals and those of our clients. Our plan is to design a special workspace where our employees want to come into the office. Moving to Baltimore Peninsula reinforces our commitment to Baltimore and our leadership position in the banking industry, as the largest bank headquartered in Baltimore.”
“We always knew that Baltimore would be a ‘build it and they will come’ office market, and now that the buildings are delivering you are seeing that dynamic play out,” said Marc Weller, Founding Partner and President at Weller Development Partners. “Since first introducing CFG Bank to the project, we always thought they would be a great fit given their aligned entrepreneurial philosophy and their focus not only on transforming the banking experience but also their commitment to the community. We are so excited to see CFG Bank moving to this new burgeoning neighborhood.”
Scooter Monroe, Vice President of Office Leasing at MAG Partners, and real estate advisor Ed Guiltinan worked closely with the teams at JLL and Weller Development Partners to secure the lease. Antony Gross and Anne Marie Paintsil with JLL represented Baltimore Peninsula. Kevin Haus and Matt Haas, also with JLL, represented CFG Bank in the transaction.
CFG Bank’s lease follows the September 2022 announcement that H. Chambers Company, an architecture and interior design firm, was the development’s first commercial tenant, having signed a long-term lease for 9,000 square feet of office space at Rye Street Market. Chambers will relocate to Baltimore Peninsula in March of 2023. Also in November 2022, the development team revealed Rye House and 250 Mission, comprising 416 brand-new affordable and market rate residences. Leasing will begin in the first quarter 2023 and the first residents of Baltimore Peninsula are expected to move in March. The project has 20% affordable housing on site, with 35 affordable units at 250 Mission for households earning 80% AMI and 54 affordable units at Rye House for households earning 50% of AMI. Additional information about Rye House and 250 Mission can be found at liveryehouse.com and live250mission.com, respectively. In January the team will launch the final building, 2400 Terrapin Way, which includes 121 residential units, of which 81 are extended stay.
Baltimore Peninsula development is expected to deliver robust community benefits to support Baltimore City and South Baltimore communities. To date, Baltimore Peninsula has committed more than $132 million in contracts to Baltimore City-certified Minority and Women Business Enterprise firms, exceeding its initial goals with 35 percent participation for MBEs and 13 percent for WBEs. In line with the project’s MWBE goals, the Baltimore Peninsula development team supported Baltimore-based MBE Conscious Venture Lab in raising $50 million for investment in local companies using innovation to create a more equitable society, specifically targeting MWBEs.
In November 2022, Baltimore Peninsula launched a new partnership with Project JumpStart – a workforce development and job placement program – to implement its 15-week construction training program that will ultimately support the continued construction of Baltimore Peninsula. The partnership, which will support the education of up to 22 students, includes financial support by Sagamore Ventures. In addition, Baltimore Peninsula announced a new partnership with Sweeten – a software company known for bringing trust, transparency, and data-driven decision making to the construction industry. Together, the parties built a tool that expands Baltimore Peninsula’s MWBE contracting goals and achievements, creates greater transparency in the procurement process of MWBEs and helps development teams communicate the status of their projects with the community.
For more information on Baltimore Peninsula, visit baltimorepeninsula.com or visit on Instagram, Facebook and Twitter.
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About Baltimore Peninsula
Baltimore Peninsula is a 235-acre redevelopment project located on Baltimore City’s prime waterfront, featuring investments from Sagamore Ventures and the Urban Investment Group within Goldman Sachs Asset Management. As one of the largest urban revitalization efforts in the United States, Baltimore Peninsula will have a fundamental and far-reaching impact on Baltimore’s future. At completion, this transformative project will include: up to 14 million square feet of new, mixed-use development; 2.5 miles of restored waterfront; and 40 acres of parks and green space. The Baltimore Peninsula redevelopment is expected to generate fresh opportunities for innovation and entrepreneurship for Baltimore City residents and its local workforce.
About the Goldman Sachs Asset Management Urban Investment Group (UIG)
Bringing together traditional and alternative investments, Goldman Sachs Asset Management provides clients around the world with a dedicated partnership and focus on long-term performance. As the primary investing area within Goldman Sachs (NYSE: GS), we deliver investment and advisory services for the world’s leading institutions, financial advisors and individuals, drawing from our deeply connected global network and tailored expert insights, across every region and market—overseeing more than $2 trillion in assets under supervision worldwide as of September 30, 2022. Driven by a passion for our clients’ performance, we seek to build long-term relationships based on conviction, sustainable outcomes, and shared success over time. Goldman Sachs Asset Management invests in the full spectrum of alternatives, including private equity, growth equity, private credit, real estate and infrastructure. Established in 2001, the Urban Investment Group within Goldman Sachs Asset Management has committed over $14 billion through real estate projects, social enterprises and lending facilities for small businesses.
About MAG Partners
MAG Partners is a woman-owned, urban real estate company with decades of experience developing impactful, iconic, large-scale projects throughout New York City. Led by MaryAnne Gilmartin, together the MAG Partners team has successfully designed, built and operated over 7 million square feet of office, residential and mixed-use projects, including over 2,000 units of housing, with a total value of over $4.5 billion. The firm believes and has proven that principles of beauty, diversity and sustainability create lasting value.
About MacFarlane Partners
MacFarlane Partners is a real estate investment and development firm that acquires, develops and manages properties on behalf of some of the world’s largest pension plans and institutions as well as for its own account. Founded in 1987, the firm pioneered the urban investment concept among institutional real estate investment managers in the 1990s and today is a leading investor in and developer of properties that promote smart growth, urban revitalization, sustainability and equitable development in urban and high-density suburban areas nationwide. It is headquartered in San Francisco and operates a regional office in Los Angeles.
About Sagamore Ventures
Sagamore Ventures is a privately-held investment company with diversified holdings that include commercial real estate, hospitality, food and beverage, and venture capital. The company is based in Baltimore, MD, and serves as the family office of Kevin A. Plank, the founder, Executive Chairman, and Brand Chief of Under Armour, Inc. Key investment holdings include Sagamore Spirit and a major equity stake in the Baltimore Peninsula redevelopment in South Baltimore. The mission of Sagamore Ventures is to execute the initiatives of the Plank Family, support the growth of our investments, and contribute to economic development and opportunity in Baltimore City.
About CFG Bank (http://www.CFG.bank)
CFG Bank, headquartered in Baltimore, Maryland, is a full-service bank that provides premier commercial, personal, and online banking solutions to the Mid-Atlantic business community, national cannabis industry and national healthcare market. Locally owned and operated, CFG Bank transforms the banking experience by delivering big bank capabilities and expertise, coupled with relationship-driven boutique bank service. CFG Bank has branches in Lutherville and Baltimore City, and a commercial office in Annapolis. For more information, visit www.CFG.bank, and follow CFG Bank on LinkedIn, Facebook and Twitter.
About JLL
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 102,000 as of September 30, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
About Weller Development Partners
Weller Development Partners is a dynamic and innovative mixed-use development firm that builds world-class communities. Led by Founding Partner and President Marc Weller and Partner Steve Siegel, our leadership team offers a wide range of expertise and experience to tackle the most complex real estate developments. At the heart of the company ethos is a triple-bottom-line approach to development, designing strategies that are financially viable, while also providing benefits to surrounding communities, the environment, and investors.
The long-anticipated deal to move CFG Bank’s headquarters to Baltimore Peninsula has been finalized.
MAG Partners has closed on a 99-year ground lease for a Chelsea development site.
MaryAnne Gilmartin’s three-year-old firm inked a deal on the northwest corner of Eighth Avenue and West 26th Street with Mutual Redevelopment Houses.
The parties declined to discuss the financial terms for the deal. Sources told The Real Deal the lease starts with an annual rent of around $2 million and has yearly rent increases that are expected to bring in over $750 million during the life of the deal.
The Memorandum of Lease reviewed by TRD shows a consideration of just under $64 million. For transfer tax purposes, this number represents the estimated fair market value of the site if it were sold but does not reflect the expected rent over its term. The city received just under $415,000 in taxes.
Mutual, also known as Penn South, is a 10-building Mitchell-Lama housing cooperative in Chelsea that sprawls from West 23rd to West 29th streets, between Eighth and Ninth avenues.
MAG Partner’s new project at 335 Eighth Avenue will rise seven stories and host 188 units in the mixed-income apartment building, along with ground-floor commercial space.
The 200,000 square-foot building was designed by COOKFOX Architects.
To qualify for the previous Affordable NY Program and assure 30 percent of the units would be affordable to low-and-middle class households, the necessary footing was installed in early 2022 with the blessing of the co-op and prior to the expiration of the program.
The retail building previously included a Gristedes, the Midtown Tennis Club, the Asylum Comedy Club and McDonald’s, all of which had leases timed to expire at the end of 2022.
Demolition will begin in the first quarter of 2023 with construction during the third quarter.
This is the second deal for MAG Partners and its real estate private equity venture partner, Safanad, after developing almost 700 housing units in Manhattan, including the nearby 241 West 28th Street.
Penn South’s retail building had brought in nearly $2 million in lease revenue before taxes and repairs, enabling a reduction in maintenance fees for its resident shareholders. But when engineers said the structure needed almost $50 million in repairs to become marketable to modern tenants, it would have caused each of the 2,820 units to pay additional assessments averaging $500 per month for three years.
Penn South hired Paul Travis of Washington Square Partners to solicit proposals for the site. After culling the responses, cooperators voted in 2021 among three choices that included redeveloping the site; a taller, all-commercial project by another developer; and Mag Partners’ proposal, which offered nearly twice as much over the lease term including yearly bumps in rent.
Susi Yu and Jeff Rosen led the deal for the MAG Partners team while Joshua Stein of Joshua Stein PLLC represented Mag Partners in the legal work for the transaction.
Dena Cohen, a partner with Herrick Feinstein, represented Penn South in the lease negotiations.
MAG Partners, the woman-owned development firm, announced today that they closed on the leasehold acquisition for 335 Eighth Avenue with Penn South, an affordable housing cooperative located in the Chelsea community of Manhattan. 335 Eighth Avenue 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 thirty percent 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 1st quarter, 2023 followed by construction in the 3rd quarter, 2023. The contextual 200,000 square foot, 7-story building is designed by renowned 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. “We are grateful for our continued development relationship with Safanad who is building a second rental community in partnership with us.”
“Our close on the 8th 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 28th Street,” 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 Square Partners represented Mutual in the transaction.
“The revenue generated from this new partnership with MAG Partners will provide critical funds that permits 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.
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About MAG Partners: MAG Partners is a woman-owned, urban real estate company with decades of experience developing impactful, iconic, large-scale projects throughout New York City. Led by MaryAnne Gilmartin, together the MAG Partners team has successfully designed, built and operated over seven million square feet of office, residential and mixed-use projects, including over 2,000 units of housing, with a total value of over $4.5 billion. Their current multi-million square foot development portfolio includes three multifamily rental buildings and a ground-up commercial development in Manhattan and a master plan redevelopment in Baltimore.
About Safanad: Safanad is a global principal-led investment house established in 2009 with offices in New York and the Dubai International Financial Centre (DIFC). The firm has executed over 40 transactions worth over US$10 billion since inception and built market-leading platforms in the US and Europe in education, healthcare, digital infrastructure, and real estate. Today, it is the owner of the largest UK care home operator with over 15,000 residents, a leading global education provider serving ~50,000 students worldwide, and a major operator of data centers across the US. Deploying its own capital, alongside strategic partners and investors, Safanad executes across greenfield / development, turnaround, and roll-up strategies. Its partners and co-investors include leading publicly listed companies, sovereign wealth funds, and institutions from the US, Europe, and Middle East. Safanad is a registered investment advisor with the U.S. Securities and Exchange Commission (SEC) and regulated by the Dubai Financial Services Authority (DFSA).
About Penn South: Penn South (legal name Mutual Redevelopment Houses, Inc.), is an affordable housing cooperative that is self-managed and overseen by its 15-member Board of Directors and subject to the regulatory jurisdiction of the New York City Department of Housing Preservation & Development. Penn South contains 2,820 apartments with close to 5,000 residents in 15 buildings on a site bounded by Ninth Avenue, West 23rd Street, Eighth Avenue and West 29th Street in Manhattan.