The Moinian Group Is The Latest NYC Developer Entering The Debt Market
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The Moinian Group is the latest major NYC developer to enter the lending side of the market, launching Moinian Capital Partners and bringing on a major investment bank alumnus to lead the charge.
Jon Chassin, an executive on Morgan Stanley's principal transactions group, has joined Moinian as managing director, and will be tasked with finding transactions of at least $25M for Moinian to either lend or take small equity stakes in properties across all asset classes. Moinian joins Kushner, Related and RXR Realty as major New York developers who have launched a lending vehicle in the last few years.
"More and more, non-bank lenders are becoming a much larger part of the CRE finance landscape," Chassin said. Because of regulations, "banks have stepped back considerably from what they’ve been able to do in the commercial real estate finance space. Even if the current administration rolls back on regulations, banks are not the type of institution that can turn on a dime, so we foresee the gap for the foreseeable future."
Moinian, currently developing the supertall 3 Hudson Blvd. in the Hudson Yards district, plans to lend about $1B per year for the next few years, Chassin said, eventually growing bigger. Chassin said Moinian's real estate expertise is what made the transition from banking to private finance appealing.
"For me, it was best-case scenario to come to a place with such a strong operational platform," Chassin said. "It enables us to move very quickly and be very flexible on terms just having the real estate capabilities."
That means any deal Moinian engages in, Chassin said, it would be "100% comfortable" taking over, if it comes to that. But they also plan to be partners with their borrowers, offering them expertise to help them fulfill the terms of their deals, whether it is advice on management, leasing or development.
"Any bank is not going to be able to walk down the hall to ask an expert 'how long would it take you to replace the leasing team if we need to at this property?'" Chassin said. "When you are a well-versed, well-heeled real estate operator, you can."
All deals will need to go through Moinian Group CEO Joe Moinian, Chassin said. The fund is looking at mezzanine loans, bridge financing, senior mortgages, preferred equity in the 7% to 9% range and some construction loans, if the spread is right.
Chassin spent 13 years in real estate banking, and while regulations have made it harder to operate as a bank in commercial real estate financing, he said he was interested in making the leap as a new challenge.
"The opportunities you see here, the things we can do, is more interesting," he said. "For me, this is the obvious next step of my career."