NYC Developer Opens Chelsea Rentals as Pipeline Gets Tougher

MaryAnne Gilmartin’s first project in the city since striking out on her own will start leasing. Future efforts might become more challenging.

New York veteran developer MaryAnne Gilmartin, who’s worked on the Barclays Center and New York Times Building, will start signing up renters for her new firm’s first completed project. 

Her firm, MAG Partners, begins leasing Monday at the Chelsea development called Ruby — named for the late Harlem-based fashion designer and dressmaker Ruby Bailey — that has 480 apartments spread across two towers. She also has two other Manhattan multifamily projects underway at 335 Eighth Ave. and 300 E. 50th St., but after the deadline to qualify for a key tax incentive expired last year, her outlook for more rental projects across the city is starting to dim.

Gilmartin is among developers warning that the New York rental market — already tough with rents hovering near record highs — could come under pressure as she expects it could take state officials at least a year or two to get serious about replacing the 421-a tax break, an incentive that encouraged building more affordable rentals. In the meantime, she expects the pipeline for rental construction to slow and some developers to turn to more lucrative condominium projects with fewer units and higher prices. 

“We’re going to have homogenized product — too much of it — brought online as a result of not having alternatives,” Gilmartin said. “That does not serve the people in New York City.”

For now, Gilmartin is focused on showing what MAG Partners can build. Ruby, the Chelsea building, plays up its proximity to the Garment District with a brick facade, herringbone flooring and generous closet space. Rents without concessions for Ruby’s market-rate apartments start at $4,330 for studios, $5,955 for one-bedrooms and $9,000 for two-bedrooms. Three-bedrooms will be priced once they’re ready to hit the market. The developer has also designated 30% of its units as affordable housing. 

Gilmartin previously led Forest City Ratner as chief executive officer before stepping down in 2018. At that firm, she worked on the Pacific Park project that includes the Barclays Center and Renzo Piano’s New York Times Building. Her new firm is one of the few New York real estate developers that’s owned and run by women.

“There’s something about our firm that’s not ordinary, which others tell us and sometimes we forget, which is that we don’t look like a typical New York City development firm,” Gilmartin said. 

The two towers are separated by a 70-foot (21-meter) courtyard that’s full of greenery and recreation areas for residents. There’s also a roof deck and swimming pool, as well as a 5,000-square-foot (465-square-meter) fitness center. About 10% of the units have private outdoor space. 

Gilmartin hopes the project will show that New York rentals don’t have to be penny-pinching commodities to be profitable. 

“There are plenty of really forgettable buildings that don’t actually stand up nicely over time and that don’t represent the best you could have done, but those buildings will still make money,” she said. “The value that we have is that principles of beauty, diversity and sustainability create long-lasting value — that you can actually build beauty and deliver returns.” 

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MAG Partners Launches Leasing at its First New York City Building, Ruby

Designed by renowned global architecture firm COOKFOX Architects, luxury rental project Ruby embraces the history and influences of the Garment District while offering a modernized luxury living experience in one of Manhattan’s most desirable neighborhoods

Link to renderings here

NEW YORK (February 27, 2023) – Woman-owned leading real estate company MAG Partners today announced the launch of leasing at Ruby, a residential development located at 243 West 28th Street in Chelsea. Located across the street from the Fashion Institute of Technology (FIT) between Seventh and Eighth Avenues, within New York City’s Garment District, Ruby offers 480 studio to three-bedroom residences amongst two towers – 30 percent of which are reserved for affordable housing – in addition to 8,500 square feet of ground-floor retail space.

Named after fashion designer Ruby Bailey, an expressive visual and performance artist and master beader, Ruby is MAG Partners’ first New York City project and the first in a portfolio of residential buildings to be named after historical and influential women.

“MAG Partners is built upon the principles of beauty, diversity, inclusion and sustainability, all of which are reflected within the living experience at Ruby,” said MaryAnne Gilmartin, Founder and CEO of MAG Partners. “As a firm founded in New York, we couldn’t be more excited to open this passion project in our own backyard. We are proud that our first building is providing much-needed housing in our city and offers thoughtfully designed residences focused on health and wellness.”

Designed by globally renowned architecture firm COOKFOX Architects, the 22-story and 23-story towers’ architectural expression is inspired by the historic fabric of the turn-of-the-century Garment District neighboring buildings, incorporating biophilic elements throughout its amenities. The thoughtful design pays tribute to creatives in the garment industry like Bailey, a Bermudian immigrant who led an artistic life in NYC. In addition to her eclectic fashion and clothing designs, she also created a series of doll-sized “mannequins” which today are part of the permanent costume collection in the Museum of the City of New York. She lived in Harlem until her death in 2003 at the age of 97.

“Our design for Ruby was inspired by the forms and patterns of Garment District masonry structures and the warp and weft of woven textiles. These historical elements lend a sense of authenticity to the new residences and elevate residential design in the neighborhood,” said Rick Cook, Founding Partner of COOKFOX Architects. “The attention to craft and amenities at Ruby that connect residents to outdoor space and gardens brings nature-connected living into one of the busiest areas of Manhattan.”

Each of the residences within Ruby are thoughtfully appointed with sophisticated details. Kitchens are designed with integrated Bosch appliances with herringbone backsplash, harkening back to the textile context. The bathrooms also feature porcelain herringbone tiles, with ceramic subway tile walls and extra-wide built-in medicine cabinets. All units include a Bosch stacked washer and dryer, three-layer, 5-inch-wide engineered oak wood flooring, keyless unit entry door hardware, Nest thermometers, solar shades throughout (including blackout shades in the bedrooms) and generous closet space. Approximately 10 percent of units have private outdoor space. 

The approximately 19,000-square-foot robust amenity package includes an array of indoor/outdoor offerings. In addition to a rooftop pool, roof lounge and grilling terrace, there is a club lounge with dining and entertainment areas, a library lounge with coworking and meeting spaces, a landscaped courtyard and lobby garden, a 5,000-square-foot, two-floor fitness center with cardio and weight training facilities, and more.

The Ruby facade is contextual masonry inspired by the rich historic architectural fabric of the neighborhood featuring hand-laid brick, richly patterned surfaces and narrow setbacks. While the exterior evokes the neighborhood’s industrial past, the interior lobby and amenity spaces provide tranquil moments promoting wellbeing including warmly-lit wood panels, angled millwork, custom panels and diffused interior lighting. The two towers are anchored by a courtyard – a private sanctuary overlooking a landscaped lobby garden, connecting the residents to nature. 

Ruby incorporates high-performance building systems that optimize energy performance, enhance indoor air quality, and improve acoustic performance to provide residents with the ultimate luxury – an urban sanctuary. Along with all of the outdoor spaces, daylighting of corridors, and the use of natural materials and patterns in design, the sustainability strategies will contribute to the building’s LEED Silver certification.

“We are thrilled to be a part of MAG Partner’s inaugural project. The thoughtfully designed and constructed development brings much-needed affordable and market-rate housing to Chelsea,” said Andy D’Amico, president and CEO of Urban Atelier Group, which is leading the construction management of the project. “Ruby is the perfect model for housing in the 21st century with a design rooted in the neighborhood’s architectural fabric and sustainable strategies that connect residents to nature. The project’s success would not have been possible without the trust and transparency between our partners to help bring the vision to life.”

To further honor Bailey, MAG Partners has partnered with The Social Justice Center at FIT – a first-of-its-kind initiative in higher education seeking to address the systemic problems faced by BIPOC youth, college students, and working professionals in the fields that drive the creative economy – to offer a scholarship for BIPOC FIT students.

“We are proud to honor the life of Ruby Bailey and the contributions she made as a Black female artist who built a lifelong career in New York City,” Gilmartin added. “The partnership with FIT will allow her legacy to live on through the lives of the next generation of BIPOC creatives looking to make their mark in the city.”

Founded by seasoned real estate professional Gilmartin, MAG Partners was formed in 2020 as a 21^st century national urban development company dedicated to diversity and inclusivity in the real estate industry. The Ruby announcement comes on the heels of MAG Partners’ 2022 successful launch of its Baltimore Peninsula project in Baltimore, Maryland, a 235-acre master plan designed for impact on a post-industrial waterfront peninsula in central South Baltimore. The project is being developed in partnership with Sagamore Ventures, Urban Investment Group within Goldman Sachs Asset Management and MacFarlane Partners.

Other NYC projects in the works for MAG Partners include nearby 335 Eighth Avenue, a mixed income, 190-unit apartment building with ground floor commercial space; 300 East 50th Street, a 194-unit multifamily building with ground floor retail at the corner of Second Avenue; and 122 Varick Street, a 175,000-square-foot boutique office development. The female names of the future residential buildings will be unveiled closer to their launches.

Ruby is conveniently located within walking distance to Penn Station which includes access to nearly every NYC subway line in addition to the Long Island Railroad, New Jersey Transit, PATH and Amtrak. Residents will enjoy easy access to the city’s leading restaurants, entertainment venues, shopping and more.

“Having worked with MAG Partners and the entire design team from inception, Douglas Elliman Development Marketing is proud to represent Ruby and bring to market this best-in-class rental development,” said Matthew Villetto, Executive Vice President, Douglas Elliman Development Marketing. “The integration of wellness, biophilic aspects, high design and finishes, unparalleled amenities and services, contextual architecture, stunning views and more have resulted in an end-product and experience that will undoubtedly stand out in the marketplace and exceed renter expectations.”  

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.

Market-rate studios at Ruby begin at $4,500 per month. Douglas Elliman Development Marketing is the exclusive marketing and leasing agent for Ruby. For more information, please visit rubychelsea.com or (212) 551-RUBY.

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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 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 COOKFOX Architects

COOKFOX Architects is a New York based architectural and interior design studio. COOKFOX has built a studio focused on high-performance, environmentally responsive, socially engaged design. The studio is well-known for innovative design that supports physical health and mental wellness at the highest standards of environmental performance. With a portfolio of diverse residential, workplace, and education projects, COOKFOX seeks to pursue architecture that restores, regenerates, and elevates our collective experience of the urban environment. www.cookfox.com

About Douglas Elliman Development Marketing (DEDM)

Douglas Elliman Development Marketing, a division of Douglas Elliman Real Estate, offers unmatched expertise in sales, leasing, and marketing for new developments throughout New York City,  Long Island, Westchester, New Jersey, Florida, California, Massachusetts, and Texas. The company’s new development hybrid platform matches highly experienced new development experts with skilled brokerage professionals who provide unparalleled expertise and real time market intelligence to its clients. The firm is heralded for its achievements in record breaking sales throughout each of its regions. Drawing upon decades of experience and market-specific knowledge, Douglas Elliman Development Marketing offers a multidisciplinary approach that includes comprehensive in-house research, planning and design, marketing, and sales. Through a strategic global alliance with Knight Frank Residential, the world’s largest privately-owned property consultancy, the company markets properties to audiences in 61 countries, representing an over $87 billion global new development portfolio. https://www.elliman.com/marketing

About Urban Atelier Group

Urban Atelier Group (UAG) is a boutique construction management firm based in New York City. UAG’s culture is rooted in the ethos of an atelier – the team views itself as a creative workshop where each member has a voice and the ability to elicit change.Founded by President and CEO Andy D’Amico and Executive Vice President and Operations Manager, James Palace, the firm emphasizes a collaborative process, working with key stakeholders to build beyond construction drawings. The firm’s portfolio of distinguished work is defined by analytic problem-solving and transparency, constructing innovative designs with unparalleled service. https://www.uag.nyc/

Ruby Nears Completion At 241 West 28th Street In Chelsea, Manhattan

Exterior work is nearing completion on Ruby, a 22-story two-tower residential complex at 241 West 28th Street in Chelsea. Designed by COOKFOX and developed by MAG Partners, Atalaya, Safanad, and Qualitas, the 400,000-square-foot project will yield 480 rental units with 144 reserved for low- and middle-income households, as well as 8,500 square feet of ground-floor retail space. Urban Atelier Group is the general contractor for the property, which is located on a through-block parcel between Seventh and Eighth Avenues with frontage on both West 28th and 29th Streets. The developers are aiming for LEED Silver certification.

Since our last update in October, the construction elevator has been dismantled from the West 28th Street elevation and the gap in the façade has been filled in. Nearly all of the 100,000 square feet of bricks have been laid by King Contracting Group and the mostly blank western sides of both towers are now clad in their final EIFS enclosure. Only minor work remains to be completed around the ground floor and upper levels. Belden Tri-State supplied the brick on this one and Cladding Concepts supplied the decorative railings.

More of the decorative railings have been put in place across the second level and eastern end of the building, and dark spandrels have been installed across the upper levels. Sidewalk scaffolding still surrounds the northern and southern ground-floor frontage but should be removed in the coming weeks once exterior work wraps up.

The below images show the look of the interior sides of the towers, which feature metal paneling lining their central cores.

Homes come with in-unit washers and dryers, central AC, and name-brand kitchen appliances. Amenities at Ruby include a dog-washing station, a media room, multiple indoor lounges, fitness center, children’s playroom, laundry room, bike storage, live-in superintendent, a 24/7 attended lobby, and an outdoor lounge with a swimming pool and an adjoining terrace.

The nearest subway is the local 1 train at the 28th Street station to the east along Seventh Avenue. Also nearby is the 34th Street-Penn Station complex with access to the A, C, E, 1, 2, and 3 trains, Long Island Rail Road, New Jersey Transit, and Amtrak.

241 West 28th Street is anticipated to be completed this summer.

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MAG Partners Buys Ground Lease for Residential Co-Op Redevelopment

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].

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MAG Partners clinches 99-year Chelsea ground lease; MaryAnne Gilmartin’s firm to deliver 188 units with Penn South co-op

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.

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MAG Partners Closes Transaction to Develop Residential Building in Chelsea

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.  

241 West 28th Street’s Brick Façade Takes Shape In Chelsea, Manhattan

Façade work is shaping up at 241 West 28th Street, a pair of 22-story residential buildings in Chelsea. Designed by COOKFOX for MAG Partners, Atalaya, Safanad, and Qualitas, the 400,000-square-foot development will yield 480 units with 30 percent reserved for low- and middle-income households, as well as 8,500 square feet of ground-floor retail space. King Contracting Group is in charge of brickwork and Urban Atelier Group is the general contractor for the complex, which is located between Seventh and Eighth Avenues on what used to be an open-air parking lot that MAG Partners acquired in December 2018 under a 99-year ground lease with Edison Properties.

At the time of our last update in January, window installation was progressing and the first portions of the brick façade had just begun to be laid. Work has been steady since then, and the warm-colored masonry now covers more than half of both superstructures.

Only the top few floors above the setbacks are left to clad on the outer elevations, while the inner walls facing the central courtyard and the flat western elevations are further behind. The walls for the central cores that go up to the mechanical bulkheads above the last residential floors have yet to be enclosed in their dark gray metal paneling.

YIMBY last reported that 241 West 28th Street is aiming for LEED Silver certification. Amenities include multiple indoor lounges, a fitness center, a children’s playroom, and an outdoor lounge with a swimming pool and adjoining terrace. Approximately 144 residences are to be designated as permanent affordable housing.

One noticeable change in the construction of 241 West 28th Street is the color of the brick, which appears to be more reddish brown than the lighter beige appearance in the renderings.

241 West 28th Street is slated for completion in July 2023.

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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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241 West 28th Street’s Reinforced Concrete Superstructure Climbs Over Chelsea, Manhattan

Construction is rising on 241 West 28th Street, a 22-story residential project in Chelsea. Designed by COOKFOX for MAG Partners, Atalaya, Safanad, and Qualitas, the 248,000-square-foot two-tower development will yield 479 units with 30 percent reserved for low- and middle-income households. King Contracting Group is doing the brick work and Urban Atelier Group is the general contractor for the complex, which is located between Seventh and Eighth Avenues.

Progress has been swift since our last update in June, when work was still progressing below grade. Now the reinforced concrete superstructure has reached the ninth floor, and could feasibly top out sometime this winter.

Crews are also about to assemble a construction crane tower.

MAG Partners acquired the Midtown, Manhattan property in December 2018 and established a 99-year ground lease with Edison Properties. The exterior of the building will showcase a richly textured brick façade and a tight grid of recessed windows. The property will yield 214,000 square feet of residential space and about 10,500 square feet of ground-floor retail space. Residential amenities include lounges, a fitness center, a children’s playroom, and an outdoor lounge with a swimming pool and adjoining terrace.

Below are additional aerial and street-level renderings of the project showing how the two towers are spaced out with what will likely be a private central courtyard, while the upper setbacks make way for numerous landscaped terraces for a select number of units. Depicted around the center of the flat inner walls are dark gray panels running down the middle, highlighting the core of each tower. These extend toward a pair of mechanical extensions that contrast with the lighter brick color facing the street. A metal canopy topped with shrubbery will protrude above the main entrance along West 28th Street.

241 West 28th Street is slated for completion in July 2023.

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