Lidl’s NYC invasion continues with big Chelsea lease

Lidl’s love affair with New York City is continuing with another large retail lease.

The German discount grocery chain is taking 23,000 square feet at the bottom of MAG Partners’ 188-unit rental project at 335 Eighth Avenue in Chelsea, the Commercial Observer reported. It will be Lidl’s second Manhattan store, joining one at 2187 Frederick Douglass Boulevard in Harlem that opened early last year.

The 15-year lease will cover the basement and ground floor of the seven-story building at Eighth Avenue and West 26th Street. Asking rents were $150 per square foot on the ground floor and $60 a square foot below. The store is expected to open in 2025; MAG Partners, led by MaryAnne Gilmartin, expects to break ground on the project later this month, according to the publication.

A CBRE team including Stephen Sjurset and David LaPierre represented Lidl, while a Cushman & Wakefield team including Alan Schmerzler and Sean Moran represented MAG.

The Chelsea outpost is one of a handful of locations Lidl plans to open in the city over the next few years. The grocer was responsible for Brooklyn’s two largest retail leases last year: a 33,000-square-foot deal in Crown Heights and a 25,000-square-foot lease in Park Slope.

Alongside CVS, Lidl’s Park Slope location will anchor the ground floor of Billy Macklowe and Greenbarn Investment Group’s 180-unit rental project at 120 Fifth Avenue.

In addition to Harlem, Lidl has existing locations in Astoria and Staten Island. It’s been growing its presence in the tri-state area since acquiring 27 stores from Bethpage-based Best Markets in 2018. Though it has mostly expanded into the region by taking over spaces vacated by other retailers, Lidl opened its first newly built location on Long Island earlier this year.

Gilmartin’s MAG Partners is building the Chelsea project on land it leased from the board of Penn South, a 10-building housing cooperative that surrounds the development site. The agreement required MAG to find a low-cost supermarket to fill the ground-floor retail space.

Gilmartin closed its 99-year ground lease on the property in January. Sources told The Real Deal that the lease starts with an annual rent of around $2 million, carrying yearly increases that are expected to bring in more than $750 million over the life of the deal. 

MAG began foundation work early last year in order to qualify the project for the now-expired Affordable New York program, meaning at least 30 percent of the units will be set aside as affordable in exchange for a tax abatement.

— Holden Walter-Warner