Moinian Group Shows the Wisdom of Long-Range Planning Through Perilous Times

While many developers put progress on pause during the worst of the pandemic, The Moinian Group took a different tack, continuing full steam ahead on renovations in its office buildings throughout New York City. Partner Insights spoke to Ted Koltis, head of commercial leasing for The Moinian Group, about how its full-steam-ahead strategy is paying off.   

Commercial Observer: While many building owners retrenched during the pandemic, Moinian barreled forward, continuing extensive development efforts. Now that some time has passed, how has that strategy paid off for your firm?

Ted Koltis: We have strong activity including several full-floor-plus leases out, and three of them are in buildings where we worked on lobby renovations before and during the pandemic. That’s not a coincidence. A great example is 17 Battery Place. We began a significant renovation project there at the beginning of September, and have seen a great amount of tour and proposal activity. That wasn’t really happening in the spring and summer of last year.

Are there other changes that Moinian made to how you approach commercial leasing during the pandemic? 

Our biggest goal is to get our product out there in a cohesive manner. So we walked through every asset. We took videos and commissioned renderings to ensure that the market knows who we are, what we offer and the quality of what we deliver. This initiative builds on the success and quality of our residential portfolio. Moinian is in a very competitive, high-end residential market here in New York, and that division of the company has done very well. We’re mimicking that now on the commercial side in a more strategic way by bringing in similar services and amenities. We’re looking in all of our lobbies at the lighting, flowers, uniforms, scents, all the things on the hospitality side that Moinian has used to elevate its brand. These are things you remember, and they help employees feel good about being back in the office environment.

Moinian has made a considerable investment in pre-built spaces, including smaller suites. How have these been received?

Most tenants in the market right now prefer built space. In an uncertain market, that’s one less decision a tenant has to make — how you’re going to build out your space. So we have had a push toward pre-built spaces, and we’re committed to investing in them throughout the majority of our properties. We’re kicking off construction of spec pre-builds now in several buildings. We need pre-built spaces to be competitive in this market, and they also help showcase what we can do and the quality of what we build.

How has the return to the office affected leasing success for Moinian’s commercial team?

If you look at the third-quarter information that just came out, this is the first quarter where the fundamentals — in terms of space on the market, average asking rate and deal volume — have all trended upward, or at least stabilized from previous quarters. Our recent office leasing success has been driven more by what we’ve chosen to do during the pandemic, and us being proactive. Given the out-performance we’re seeing thanks to our continued renovations, the return to office will help us supercharge our leasing, and validate what we’ve done even more.

Moinian places great importance on the concept of hospitality. Talk about how this comes into play in Moinian’s office properties, and how it has impacted leasing of late.

Hospitality isn’t new to us. We already have a hospitality standard on the residential side that’s very strong and has really elevated the brand. One of the main factors that brought me here is the ability to take some of that expertise and apply it to the office side in a real-time way — not just experimenting, but being able to put it into practice smoothly, quickly, and effectively on the office side. That’s something we’re positioned to do better than almost anyone out there.

Moinian had two major projects put on hold due to COVID. What is the current status of 220 11th Avenue and 3 Hudson Boulevard?

We’re seeing more activity on those now than we did six months ago, and we anticipate that increasing over time as return-to-work takes hold. Both of those projects are in high-demand neighborhoods. There’s very little supply in west Chelsea for modern glass and steel construction. So 220 11th Avenue sits in a great spot there. As for 3 Hudson Boulevard, we all know the success that Hudson Yards has had. I’m hearing that space is being absorbed there faster than in other submarkets, so I think Hudson Yards will be a very supply-constrained market. The future for both of those projects is certainly bright, and I’m hopeful that we’ll have more significant news in the next six months or so.

You also had some significant lobby renovations in the works. Where do those stand?

We kicked off a $7 million renovation project at 17 Battery Place at the beginning of September that will include an outdoor plaza. We anticipate the majority of that construction will be done in the first quarter of next year. The project is garnering a great response from larger tenants who are looking Downtown. Then there’s also 115 East 57th Street, Plaza Medical, which is a significant repositioning of a well-located building on 57th Street between Park and Lexington Avenues including a brand new, double-height, street-level lobby. The property already has a desirable location. To create a street-level entrance for that property with a modern lobby changes the perception of that entire building. So we’re excited about that, and anticipate completion by year’s end. 

Has the pandemic reinforced for Moinian how the company’s unique, long-view approach to leased properties was the correct one?

The amount of paper we have trading right now across the entire portfolio is surpassing where we were pre-COVID, square-footage-wise, which to me is a great sign, and a validation of our long-term approach. Our tenants have one less worry knowing that they’re with a long-term landlord that will own the building for a long time. Joseph and Mitchell Moinian have built a tremendous company that continues to evolve in a dynamic way. Whatever deal we do today, for any length of time, we can commit to it, because we’re going to be around.