Former Barneys in Chelsea to Become Rental Housing

A Chelsea property that once housed department store Barneys has been sold and will be converted into a 44-unit rental property with affordable units and ground-floor retail space.

Wolfe Landau’s Brooklyn-based Watermark Capital Group will utilize the city’s new 467m program for the conversion of the four-story former retail space. The property’s address is 101 Seventh Avenue. It’s located on the northeast corner of West 16th Street, and housed within the base of the residential co-op at 161 West 16th Street.

Landau closed on the purchase from seller Regency Centers of Connecticut last week. The deal’s pricing could not be determined.

The current retail condominium, which PropertyShark cites at 56,870 square feet for retail, has as-of-right zoning and efficient floor plates that support residential layouts.

Northwind Group originated the $10.5 million senior first-mortgage loan for the acquisition and pre-development of the vacant property. 

According to the Northwind Group, the loan was originated by Northwind Debt Fund III, the firm’s latest closed-ended vehicle focused on real estate credit investments in New York City and other supply-constrained major urban markets across the United States.

“We identified an opportunity to originate this loan at a favorable basis, in an irreplaceable location just north of the West Village and east of Google’s Eighth Avenue office,” Ran Eliasaf, founder and managing partner of Northwind Group, said.

Eliasaf said the building’s small floor plates are naturally suited for residential use, and that over 120 feet of frontage along Seventh Avenue provides ample light and air on the west-facing façade.

“We are pleased to support the transformation of a landmark retail space into urgently needed rental housing, and look forward to partnering with Watermark Capital Group on the successful delivery of this project,” Eliasaf added.

Landau, founding partner of Watermark Capital Group, said, “The Northwind team worked quickly and efficiently to meet a quick closing timeline while adhering to the terms of our agreement and providing flexibility where needed. I look forward to working with Northwind on future deals.”

The financing was arranged by Moshe Majeski of The Moshe Group and Adam Sprung of Broward Property Advisors.

According to information provided by YuhTyng Patka of the law firm Adler & Stachenfeld, the 467m program provides a 35-year declining property tax exemption for those that pull a permit for the work south of 96th Street by June 30, 2026. A three-year construction period is provided a 100 percent exemption, while a 90 percent exemption is granted for years 1 through 30. After that, taxes phase back in over the next five years at 10 percent per year.  

The 467m also requires 25 percent of a project’s units to be rented to people with a weighted average income equal to 80 percent area median income (AMI), with 5 percent of them at 40 percent AMI. All the affordable units in this case will be permanently rent-stabilized.

Avison Young marketed the sale for Regency, and Patka represented Watermark for the 467m conversion.

StreetEasy shows the 19-story building was designed by architects Farrar & Watmough, and built by developer Henry Mandel in 1930.

This story has been updated to reflect Avison Young and Patka’s roles in the deal.