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A Prominent NYC Investment Firm Adapts To Market Fluctuations To Expand Its Portfolio In West Chelsea

A rendering of a scenic West Chelsea rooftop within blocks from Hudson Yards and the High Line to the Chelsea Market and Chelsea Piers.

Concerns about a recession have led real estate professionals down a tough road in an ever-changing environment. It only seems to get more treacherous to navigate with inflation and staggered enthusiasm for return-to-office.

More companies are decreasing their real estate footprint to cut costs and save their businesses from higher inflation risk down the line. Gartner Inc. Chief of Finance Research Alexander Bant told The Wall Street Journal that “companies say they are reducing real estate and consulting expenses at a faster pace because those areas are least likely to be essential if the economy were to rebound.”

However, long-term investors like NYC-based The Moinian Group have shown that real estate and in-person collaboration remain crucial elements in this volatile economy. Celebrating 40 years in real estate, The Moinian Group predominantly focuses its portfolio in Manhattan, but has recently expanded into Brooklyn, and has completed additional projects in South Florida, Dallas and Los Angeles. The company’s newest venture is in its home borough with two ground-up developments on the West Side.

Bisnow spoke with Ted Koltis, The Moinian Group's executive vice president of commercial leasing, about its start, how it adapts to new challenges in CRE and two of its current projects: 3 Hudson Boulevard and The Hudson Arts Building.

A rendering of the Far West Side, where 3 Hudson Boulevard will be a 1.9M SF office building with unobstructed 360-degree city and river views.

Bisnow: What is Moinian Group’s approach to investment in its key neighborhoods?

Koltis: Joe Moinian was an early investor in the Flatiron area and along the Far West Side more than 25 years ago. This was when the rail yards were an industrial graveyard and a blight on the city and before either submarket transformed into what they are today.

The Moinian Group are long-term investors who continue to participate in the evolution of various neighborhoods, including Lower Manhattan, the far West Side and Midtown South — areas that to different degrees have become magnets for Class-A corporate tenants, residential towers and high-end retail.

A rendering of the main entrance to 3 Hudson Boulevard, which sits at the doorstep of Bella Abzug Park with direct access to the 7 Line subway.

Bisnow: Can you speak on the 3 Hudson Boulevard project?

Koltis: We are developing 3 Hudson Boulevard in partnership with Boston Properties, a world-class developer of Class-A office products and a tremendous partner. 3HB is a freestanding, 1.9M SF, Class-A office tower, located on 11th Avenue between 34th and 35th streets, with direct access to Bella Abzug Park and the 7 Line subway.

The Moinian Group spent several years collaborating with the MTA as they developed the new 7 Line subway station beneath the property while we and our partner simultaneously self-funded and completed construction of the 3HB foundation. As one of the only freestanding office properties in the Hudson Yards District, 3HB is in a prime location providing unparalleled views of the NYC skyline and the Hudson River.

The ground floor will feature a high-end restaurant and private sky lobbies on higher floors for an anchor tenant and several double-height floors with outdoor terraces. The property will go vertical once an anchor tenant is signed, and we are speaking with several significant corporate entities about leasing space in the building.

A rendering of 220 11th, a signature Moinian Group development occupying a full block on 11th Avenue between 25th and 26th streets featuring modern architecture and ample green space for a unique office building in West Chelsea.

Bisnow: What are the key elements of The Hudson Arts Building?

Koltis: About 10 blocks south of 3HB, The Hudson Arts Building, located at 220 11th Ave., will be a boutique, 10-story, 200K SF state-of-the-art office building in Chelsea, which is becoming one of the most dynamic NYC neighborhoods due to the new office construction, retail and residential offerings that are mixing in with the longstanding cultural venues in that area.

The Hudson Arts Building rises 145 feet across the street from the Hudson River and includes column-free, side-core floor plates with direct river views and a dedicated first-class bicycle room and shower area.

The property will also include ceiling heights up to 17 feet on the office floors and 26 feet on the ground floor, exclusive oversized terraces and provide tenants with over 15K SF of outdoor space, including direct access to a 12,400 SF roof terrace space — one of Manhattan’s largest newly built rooftop spaces — spanning the block from West 25th to West 26th streets.

The Moinian Group is very confident in this project; we are building it on a speculative basis and with the penthouse office floors asking $200 per SF. The project will be ready for tenant build-out in Q1 2024.

A rendering of the 40-foot lobby in 3HB that will feature food and beverage offerings on the ground floor, while the escalators lead up to exclusive sky lobby access for office tenants.

Bisnow: What was the thought process behind choosing these projects?

Koltis: The NYC office market itself is experiencing a flight to quality in a significant way. There is a huge delta in demand between somewhat older office properties — even as recent as just 25 years old — and new construction. New, Class-A space with the most modern construction, connectivity and amenities is in significant demand and commanding market-leading rents.

Having two projects such as 3HB and The Hudson Arts Building, both on the far West Side, is a strategic advantage for us. From an office standpoint, this area has become the most modern part of NYC. We are in a tremendous position to outperform from a leasing standpoint versus existing NYC office buildings.

A rendering of Hudson Arts Building's penthouse terrace showing a spectacular view of the Hudson River Park.

Bisnow: What are the current challenges in the office market and West Chelsea portfolio?

Koltis: On the office side, the biggest challenge all owners face is what the return-to-office looks like. What do tenants need in regard to their physical space to help recruit and retain the best talent to work efficiently, and how do we attract tenants back?

One strategy is that we have taken cues from the hospitality-style amenities we include in our residential and hotel assets and applied them to our office product to bridge the transition from home to work life. This includes new lobbies, floral arrangements, scenting and advanced lighting. We want our office tenants to feel like they are walking into a high-end residence or hotel.

We have also proactively built and furnished larger office spaces at many of our existing properties to make it easier for tenants to get deals done. We are designing office floors in those buildings with fewer private offices and more open, collaborative spaces and pantries to help cater to today’s nontraditional work environment. We have several deals that we completed on these types of spaces and others we are working on and hope to announce them in the coming months.

This article was produced in collaboration between Studio B and The Moinian Group. Bisnow news staff was not involved in the production of this content.

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