On Tuesday, Oct. 3, developers broke ground on a new mixed-used building at 335 Eighth Ave., which is slated to bring to the neighborhood 188 residential units—30 percent of which will be reserved for low- and middle-income tenants—and a new Lidl grocery store.
The seven-story, 200,000 square-foot building, developed by real estate company MAG Partners, will be located at the corner of Eighth Avenue and West 26th Street—near the affordable co-op Penn South’s 15-building complex. It will be MAG Partners’ second multi-family development in Manhattan, after Ruby on 243 W. 28th St. The project is co-financed by the investment firm Safanad, and is developed with the Affordable Housing New York program, otherwise known as the 421a tax break.
The Eighth Avenue lot formerly hosted a deteriorating, Penn-South-owned commercial building with a Gristedes, McDonald’s, and tennis club on the ground floor. Unable to afford the cost of repairs and facing the expiration of commercial tenants’ leases, Penn South voted to lease out the site for redevelopment. They selected MAG Partners in 2021.
MAG Partners signed the 99-year ground lease in December of 2022, according to city records. Rent paid to Penn South will go toward subsidizing the Mitchell-Lama co-op’s 2,820 apartments, maintaining affordability for its residents. For MAG Partners, annual rent will begin at $2 million and increase over the length of the lease, totaling at around $750 million for Penn South, sources told the Real Deal.
Design for the new building “matches neighborhood context, mirroring and updating the redbrick aesthetic of the Penn South towers,” says a press release from MAG Partners. It will also integrate passive-house design, planted courtyards, and terraces, according to Rick Cook, Founding Partner of COOKFOX, the architecture firm on the project.
Demolition of the old building on the site was completed in September. The development’s groundbreaking ceremony took place on Tuesday, Oct. 3.