COMMERCIAL
The Moinian Group Amps Up Leasing Success in a Tough Market
Commercial Observer | Aug 2, 2022
COMMERCIAL
The Moinian Group Amps Up Leasing Success in a Tough Market
Commercial Observer | Aug 2, 2022
In a difficult market and throughout a challenging time, The Moinian Group, one of the largest privately held real estate groups in the U.S. with a portfolio of over 20 million square feet, has never stopped doing business, continuing development and leasing on some of the finest Class A office buildings in Manhattan, among others. Partner Insights spoke with Ted Koltis, head of commercial leasing for The Moinian Group, about some of their current and future endeavors.
Commercial Observer: Given the difficulties the commercial real estate market has had around the pandemic, why is The Moinian Group finding this to be a really good time for both deals and development?
Ted Koltis: Throughout this period, we have seen two bright spots amid the difficulties. One is a flight to quality with newer construction having success. We are right in that conversation with our new development projects on the West Side at 3 Hudson Boulevard and also 220 11th Avenue, where we elected to begin speculative construction early this year. As for the overall market, the area seeing success has been Midtown South with that submarket even surpassing Midtown in terms of average asking rents. A good portion of our existing portfolio resides in Midtown South and I can tell you we are seeing strong activity first-hand. We have well-located, quality space across several properties that we’ve been busy upgrading — improving common areas, installing new lighting, storefronts, and other touches. We aggressively embarked on an upgrade program for all of our existing spaces under 7,000 square feet, providing prebuilt and furnished space. We’ve even gone further to capture activity by prebuilding full floors as large as 18,000 square feet in our Midtown South portfolio. Those decisions have worked well for us. On one of our floors, we were able to come to terms with a tenant before we even began swinging a hammer, just on the prospect of what we were doing. These improvements are driving activity to the space, allowing us to take advantage of a bright spot in the New York City office market as it continues to find its footing post-pandemic.
What are some of the common themes — in terms of amenities, services, design, etc. — that tenants can look forward to at The Moinian Group’s new properties?
Furnishing space is a big aspect of it. We completed 10 leases in the first half of 2022 across five separate properties. For all 10 transactions, we provided built and furnished space. We are renovating the lobbies of four of our properties as well as any vacant floors, which we will prebuild and furnish. Traditionally, you would likely furnish a floor between up to 5,000 or even 7,000 square feet. Today, we are furnishing spaces in excess of 10,000 square feet. Most real estate companies don’t do that, so that has been a true differentiating factor for us. When we embarked on our upgrade program, we looked at what types of amenities and services tenants were looking toward in terms of differentiating space. There has been a real focus on the pantry area and gathering spaces, so we have created a more open concept in our pantries. Traditionally, you had countertops and cabinetry. We have enhanced that approach to more open shelving, and where you might have had a table and some chairs, we have created more bench or high-top bar seating that fosters collaboration, making it easier for people to sit together in pantry areas. We have also focused on putting more open space and soft seating throughout our built spaces. Given the new way people are working, they are often using couches and soft seating to actually do work and hold meetings rather than traditional conference rooms or offices.
Tell me about The Moinian Group’s 2022 so far in terms of the flow of business.
In general terms, we are well ahead of where we were last year, and before the end of the summer we will have surpassed our 2021 leasing totals with much more in the pipeline. We have got a number of buildings where there have been significant upticks in occupancy. For example, we are forecasting that 545 Fifth Avenue will jump from 60 percent occupancy to close to 90 percent, with similar stories at our properties at 60 Madison Avenue and 72 Madison Avenue. Those properties were all hovering around 30 percent vacancy after the pandemic. With the activity we are getting now, we will be somewhere close to 10 percent vacancy or less at all our major properties by the end of the year.