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OZK Bank Funds Another Deal for Developer
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MaryAnne Gilmartin’s firm secured a new partner for its apartment building in Chelsea, along with $73 million in construction financing.
MAG Partners and Safanad are marrying MetLife Investment Management to construct a 188-unit building at 335 Eighth Avenue.
The joint venture closed a $73 million loan from OZK Bank.
In January, MAG and Safanad inked a 99-year ground lease for the site, which is controlled by Penn South, a 10-building Mitchell-Lama housing cooperative.
The co-op’s board of trustees voted in 2021 to create a floor lease at 335 Eighth Avenue, in order to generate profits at the site. At the time, on-site leases were expiring on this 60-year-old advertising building, for tenants such as Gristedes, McDonald’s and a tennis center.
Demolition and construction began in the fall of this year, even though the foundation was in place for the allocation to qualify for the now-expired 421a asset tax relief. The allocation will include 188 apartments, 30 percent of which will be reserved at affordable rates. To finally qualify for tax exemption, the structure will need to be finished by June 2026, the progression team estimates that most of the paintings will be finished by the end of 2025.
This latest closing follows another for MAG Partners last month. Bank OZK provided $95 million in construction financing for 300 East 50th Street, a 195-unit project in Turtle Bay.
“It is thrilling to end 2023 with a second residential closing and now nearly 400 units under construction in Manhattan,” Gilmartin said in a statement.
Construction financing is not easy to find for multifamily projects, especially those that have to meet the 421a final touch deadline. Lenders have required developers to ensure the structure is finished by 2026. Recognizing the demanding situations developers face, the Adams administration introduced a task force this month to bring projects into compliance with the tax relief deadline.