MAG Partners JV to Develop Mixed-Income NYC Project

The second venture between MAG and Safanad will be developed under the Affordable NY Program.

The development site at 335 Eighth Ave. Image via Google Street View

A joint venture between MAG Partners and Safanad has completed a leasehold acquisition for 335 Eighth Ave. for the ground-up development of a seven-story, 188-unit mixed-income apartment community in Manhattan’s Chelsea neighborhood. The joint venture is developing the community alongside affordable housing cooperative Penn South. The companies will demolish the lot’s existing building in the first quarter and begin construction in the third quarter. After completing construction, 335 Eighth Ave. will be added to Penn South’s existing cooperative, which includes more than 5,000 residents. The property is expected to be ready for move-ins in the third or fourth quarter of 2024.

Development of 335 Eighth Ave. is taking place under the Affordable NY Program, with nearly a third of  units reserved for low- and middle-income renters. The new building, which is expected to total 200,000 square feet, is being designed by COOKFOX Architects and will be built on the site of a former commercial building that had fallen into disrepair. MAG plans to add an additional 12,900 square feet of grocery-anchored retail space to the ground floor. Situated in Manhattan’s Chelsea neighborhood, the community will be flanked by the district’s numerous public parks and commercial offerings, and it will be within walking distance of midtown.

MAG Partners Principal & Head of Development Susi Yu and Managing Director Jeff Rosen represented the firm in the transaction. Joshua Stein and Alexa Stein of Joshua Stein PLLC, alongside Dena Cohen and Francesca Venezia of Herrick, Feinstein LLP oversaw the transaction’s legal proceedings.

Affordable housing challenges in the Big Apple

Despite record-high demand, New York City’s affordable housing pipeline has stagnated due to supply and labor shortages taking place amid a looming recession. According to data from the National Low Income Housing Coalition, there is a deficit of 615,025 affordable rental homes, with 70 percent of those renters experiencing severe cost burdens.

Despite such headwinds, developers have taken to ground-up construction, redevelopments of existing space and designating a certain number of affordable units within their projects. One recent example of this is seen in Chelsea, where Douglaston Development recently commenced leasing at 3Eleven, a 938-unit rental community containing 235 affordable living arrangements.

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