MAG Partners Secures $173M Construction Loan for Manhattan Property

The financing was provided by Madison Realty Capital and will fund the development of a 480-unit mixed-income project.
Rendering of 241 W. 28th St. Image by COOKFOX, courtesy of Madison Realty Capital

Madison Realty Capital has provided a $173 million construction loan to a joint venture led by MaryAnne Gilmartin’s MAG Partners that will develop a 22-story, 480-unit apartment building at 241 W. 28th St. in the Chelsea section of Manhattan. The project, MAG Partners’ first ground-up development deal, will be built under the Affordable NY program with 30 percent of its units reserved for low- and middle-income residents.

Gilmartin, a former Forest City Ratner president & CEO, is the founder & CEO of MAG Partners, a private development firm. In late July, Mack-Cali Realty Corp. named Gilmartin interim CEO. In December 2019, Gilmartin had exited an earlier partnership formed in January 2018 with L&L Co.’s David Levinson and Robert Lapidus. The Chelsea project was one of the developments she kept in her portfolio when that partnership ended. MAG Partners joint venture partners in the Manhattan mixed-use multifamily project are Safanad, Atalaya Capital Management and Qualitas, one of the biggest asset managers in Australia.

MAG Partners acquired the site in December 2018 in a 99-year ground lease with Edison Properties. The 372,000-square-foot development, which includes ground-floor retail, is expected to be completed in late 2022.

Madison provided a three-year loan at 65 percent loan-to-cost. The financing was arranged by Adi Chugh of Maverick Commercial Properties. Jeff Rosen from MAG Partners represented the ownership. The financing will support construction throughout the estimated 30-month construction period.

Describing the financing as “a relatively low loan-to-cost,” Zegen said in a prepared statement the firm filled a void that would normally be financed by banks. He noted the project, which is located within a few blocks of Hudson Yards and prominent tech company expansions planned for the West Side, will be one of the few new multifamily rental projects built in Manhattan in the next few years. Madison, which handles both debt and equity transactions, has completed numerous deals through the pandemic, focusing mainly on construction lending for multifamily and some industrial loans.

Gilmartin also pointed to the location, calling it “incredibly desirable” in her comments. She said she expects to see strong long-term demand for the mixed-income housing when the building opens in 2022. In the meantime, Gilmartin noted it will bring hundreds of jobs at a critical time for the city.

The architectural firm COOKFOX has designed the building. The MAG Partners team previously worked with COOKFOX on 550 Vanderbilt and 535 Carlton in the Pacific Park development in Brooklyn.