By: Alison Gregor
May 21, 2006
JOSEPH MOINIAN may have ended his recent buying spree of commercial and residential property in the New York metropolitan area, but that doesn’t mean that he is slowing down.
Mr. Moinian, the chief executive of the Moinian Group, which he founded in 1980, thinks that it’s now time to develop rather than to acquire, and he is focusing on a handful of properties in Manhattan.
“The Moinian Group owns enough land,” he said, “that for the next seven to eight years, if we don’t acquire any land, we’ll be busy building what we have.”
Indeed, his company owns and manages some 20 million square feet of mostly offices and luxury apartments — much of which was acquired over the last few years — in Manhattan, Long Island and northern New Jersey, and is now in competition with New York’s top residential builders, like Donald Trump and the Related Companies.
It’s been a long road, though, for Mr. Moinian, who is 52. He arrived in the United States alone from Iran in 1971, an ambitious 16-year-old seeking a better education. The only people he knew in the United States were two brothers of a brother-in-law back in Iran who were living in Forest Hills, Queens. He stayed with them for a few days, then found an apartment share and his first job, at the Cozy Corner restaurant in Forest Hills, where he worked in the kitchen.
Mr. Moinian finished high school and studied business administration at City College, though he never received a degree. His first business venture was in women’s fashion, an apparel company called Billy Jack for Her (named after the 1971 movie “Billy Jack”).
“My family came from the textile business,” said Mr. Moinian, all of whose family members have since relocated to the New York area. (He and his wife, Nazee, also from Iran, have five children.)
“I came here knowing the fabric and yarn and weave and colors and prints,” he said. “Probably one reason I was so successful in fashion was I understood my textile.”
Business associates say Mr. Moinian understands his buildings just as well, from their bricks and mortar to their position in the real estate market to how to get financing to make a lightning-fast buy.
Mr. Moinian had plowed the proceeds from his fashion business, which he has since retired, into real estate, first acquiring loft buildings that he converted to office space in Midtown and the Flatiron district of Manhattan.
He visits many of his properties daily. “He knows the mason, he knows the bricklayer, he knows the Sheetrock-er,” said Robert Verrone, a managing director at Wachovia Securities, which has provided financing for the Moinian Group since 1997.
Ask Mr. Moinian about a building in Manhattan, Mr. Verrone said, and he can often list its square feet, its layout, the owner and when it was last sold. “He’s a real student of New York City real estate,” he said.
Mr. Moinian also seems to have a knack for anticipating real estate trends. He entered the downtown market in the mid-1990’s and is now one of the two leading private investors there — the other being Kent Swig of Swig Equities.
Mr. Moinian plans to break ground within the next several months on a 400-room W Hotel and condominium a block south of ground zero. The hotel will be at 123 Washington Street, next to the former Deutsche Bank building, which is slated for demolition. That site will be sold to a residential developer.
When asked about his possible interest, Mr. Moinian laughed and said, “I’m a good candidate.”
At 20 West Street, where Mr. Moinian continues to sell apartments at the 280-unit Downtown Club conversion, formerly the Downtown Athletic Club, he also took advantage of a neighboring site. “The Downtown Club was difficult, because it was landmarked,” he said, which meant that holes couldn’t be punched in the walls for air-conditioning. “We had to create a centralized air-conditioning unit, a chiller, on a neighboring building’s roof, but it was O.K., because I happened to own that building, too.”
Mr. Moinian has been leading the development pack into the city’s Far West Side neighborhood as well. In 1996, he pressed boundaries by going to Eighth Avenue to develop two residential towers, the Biltmore, at 271 West 47th Street, and the Marc, at 260 West 54th Street. Now, he is developing Atelier, a 46-story residential tower with 478 suites that is on West 42nd Street between 11th and 12th Avenues. It is the first phase of a mixed-use project that will encompass almost a full city block. The second of the three phases is expected to begin in the next few months.
In the past, some people in the real estate industry said Mr. Moinian paid too much for some of his properties, including office buildings at 180 Maiden Lane, which he bought for $355 million, and 530 Fifth Avenue, which he bought for $210 million, both in 2004, according to city records. What would happen, the critics wondered, if office rents fell or interest rates rose?
“I always said time will tell,” Mr. Moinian said. “I just have one regret, which is that I didn’t buy even more buildings.”
Mr. Verrone agreed that the two buildings and others that Mr. Moinian bought earlier look like “bargains nowadays.”
As interest rates have crept up, Mr. Moinian has refinanced the floating-interest-rate loans that enabled him to make many of his pricey acquisitions.
Andrew L. Herz, a partner practicing real estate law at Patterson Belknap Webb & Tyler, said Mr. Moinian and his group of investors seemed to have gambled at the right time. “It takes a certain personality to make a big bet with numbers that aren’t there yet,” Mr. Herz said, “but the people who do really well in this business are the ones able to make those bets.”Mr. Moinian’s business dealings haven’t been without conflict, however.
Mr. Moinian said he learned a lesson about dealing with tenants when he was sued by some residents who had moved into 90 Washington Street, the old Bank of New York building, in 2003. The tenants had complained, among other things, of nonworking elevators and faulty heating that led to burst pipes and extensive flooding. Mr. Moinian said that in order to honor agreements with tenants he had allowed them to move into the apartments before all the work had been completed.
Adam Leitman Bailey, the lawyer representing the tenants, said that Mr. Moinian eventually settled with the tenants, giving them two months’ free rent and fixing the building’s problems.
“I keep in touch with some of the tenants there, and they say it’s now a beautiful building,” he said, adding that Mr. Moinian is an impressive negotiator. “He’s got a tremendous presence.”