US real estate firm Moinian mulls $500m TASE offering

Joseph Moinian

The company has held a series of meetings to select a local underwriter for a debt issue in Tel Aviv.

US real estate firm Moinian Group, controlled by Joseph Moinian, is considering a huge $500 million (NIS 2 billion) bond issue on the Tel Aviv Stock Exchange (TASE), sources inform "Globes." Company representatives recently held a series of meetings with local underwriters in order to examine the possibilities, and to select the underwriter to lead the offering.

Founded in 1982, Moinian is one of the largest private real estate groups in New York. The group owns, develops and operates a variety of properties, including offices, hotels, commercial centers, and residential buildings. Its properties are spread all over the US, but most of them are in New York.

The company's portfolio contains 16 commercial buildings, 10 residential buildings and apartment buildings, and five hotels covering an aggregate 20 million sq.m. The company's properties are located in large cities in the US; beside New York (Moinian is one of the most prominent players in residential real estate in lower Manhattan), the company owns property in Chicago, Dallas, and Los Angeles.

The company focuses on developing areas of New York City. On its website, it boasts about its high-quality tenants, such as Bank of America, prestigious US supermarket Neiman-Marcus, the Starbucks chain of cafes, United Airlines, and the R&Y advertising firm. The company also describes itself as a pioneer in several areas, including development on New York's East Side, turning lofts into offices in the Flatiron area and Midtown South, and turning offices into residences in downtown New York.

Because the company owns an aggregate area of 15 million sq.m. (including four million sq.m. in Westside Manhattan) that it plans to develop, the purpose of the bond issue is probably to finance construction and promote projects. It is believed that the funds are mainly earmarked for two projects on which Moinian is currently focusing: construction of one of the largest luxury residential buildings in New York (at 605 West 42nd St.), and a luxury office tower on Hudson Blvd. in Westside Manhattan, which it describes as its flagship project.

This is a rather ambitious project that will include a 66-storey, 1,050-feet tall solar office building with 1.8 million sq.m. Among other things, the building will have high ceilings, glass walls, and a 360 degree view.

Joseph Moinian is the company's founder and CEO. Moinian, 60, is a Jewish businessman who is seeking to use his affinity to Israel to benefit from the excess liquidity in the Israeli market. Born in Iran, he immigrated to the US at age 17. When he was 28, he founded a women's fashion chain named Billy Jack for Her, and several years later leveraged his profits from that company to found the real estate firm that bears his name.

If the bond issue goes through, it will be the biggest of all the recent bond issues in Israel by US real estate companies. The largest so far was by Extell Development, one of the largest real estate developers in Manhattan, which is owned by Jewish businessman Gary Barnett. Extell raised NIS 1 billion last May from Israel investment institutions, even though its bonds, rated A2, have no liens or collateral.

Besides Extell, other foreign real estate companies that have already issued bonds in the local market have utilized the boom in the Israeli corporate bond market and the low interest rate to raise an aggregate NIS 2.5 billion. Zarasai, owned by Joel Wiener, raised NIS 750 million; the Leser Group, owned by Abe Leser, raised NIS 600 million, and Brookland Capital, owned by Boaz Gilad and Assaf Fitoussi, raised NIS 120 million.

Published by Globes [online], Israel business news - www.globes-online.com - on October 23, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

Joseph Moinian
Joseph Moinian
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