Joe Moinian, founder and CEO of the Moinian Group, is one of the formative figures in New York's real estate industry. His career is marked by the realisation of large, city-defining projects, including 'Atelier' on Manhattan's Far West Side, as well as the acquisition of prestigious office buildings such as 1775 Broadway, now known as 3 Columbus Circle. He was also active in the hotel sector, including with the W New York Downtown, and expanded beyond New York, as evidenced by the ownership of the Willis Tower in Chicago, once the tallest building in North America.
Moinian is currently embarking on another major undertaking in Hudson Yards: the development of a 1.9 million square foot Class A office building, designed by FXCollaborative. This project addresses a market with an urgent need for new office space. In a conversation with Commercial Observer on 25 September, Moinian offered insights into his past, present, and future in the real estate business.
From Fashion Retail to Real Estate Development
Moinian began his professional career in fashion retail, where he worked for over 19 years. With the earnings generated there, he simultaneously began acquiring properties. The desire to spend more time with his family led to an increased focus on real estate. Initially, the Moinian Group acquired loft buildings, primarily in Midtown South, which were converted or upgraded into office buildings. Some of these properties, acquired in the early 1980s, are still owned by the group today.
A turning point was Mayor Rudy Giuliani's 1994 revitalisation plan for Downtown Manhattan below Murray Street. This offered ten years of tax breaks for developers who converted obsolete office buildings into apartments. The Moinian Group was among the first to convert office space into residential use and still owns these buildings. Later, the company turned to new construction, as it was less prone to surprises compared to conversions. Examples include the Biltmore Tower with 400 apartments and The Marc at 57th Street and Eighth Avenue.
Strategic Land Acquisitions and Hudson Yards
Moinian emphasised the importance of strategic land acquisitions: 'It doesn't matter what the zoning is – one day Manhattan will be completely built out.' He acquired extensive parcels from Eighth Avenue to Eleventh Avenue. Following rezoning by Mayor Michael Bloomberg, which allowed for five and a half million square feet of construction area, the Moinian Group developed several buildings on 42nd and 43rd Streets. These include 'The Sky', currently the largest rental residential skyscraper in New York City with 1,175 apartments and 3,000 residents, as well as 'Atelier', a condominium with 478 units.
The rezoning of Hudson Yards was advantageous for Moinian, as the highest floor-to-area ratio in Manhattan is on 34th Street, where he owns property. For 3 Hudson Boulevard, immediately adjacent to Site K, all plans and permits are in place. The foundations have been excavated. The Moinian Group is currently negotiating with a major anchor tenant who would occupy half of the building. Such an anchor tenant is crucial for securing financing, particularly a construction mortgage, for a project of this magnitude. A project with 1,540 apartments is also planned for Site K, which is set to surpass 'The Sky's' current record, along with a five-star hotel.
Moinian was critical of the role of governmental and local support for developers. Current incentive programmes, such as the 485-x programme and its labour requirements, are insufficient. High interest rates also pose a significant challenge, making the construction of new projects difficult. He pointed out that the figures are hardly sustainable for a new developer without the advantage of lower historical land costs. As long as interest rates do not fall, no significant construction activity is expected in the near future.
