Local buys 90 John Street.

The Downtown property at 90 John Street has sold through a pre-packed deal to a group of investors led by Joseph Moinian, who owns a variety of primarily residential live/work properties, industrial properties and office lofts elsewhere in the city.

The former Joseph Neumann building was sold for close to $7 million through GE Capital and was marketed by Ron Cohen and Richard Baxter at Edward S. Gordon Company.

The 410,000 square-foot tower property has 28-stories "and a penthouse," and is ideally situated to take part in the upcoming 24-hour Downtown community. As it is just a stone's throw from the South Street Seaport, the 1930's building is already part of the area's retail and restaurant district and is close to numerous parking facilities.

Moinian, who leads the "Mazal Group LLC," is delighted with his purchase, which came about after conducting extensive due diligence that included poking into every nook and cranny himself.

Mitchell Arkin from Newmark has been put in charge of renting the offices and managing the building.

"We are putting a program together as far as advertising for commercial offices as well as looking in to the possibilities of what other ideas may come about in terms Mayor Giuliani's zoning changes and tax break advantages, like the residential live/work," said Moinian.

Moinian said that while he owns a building in Midtown with some vacant space, he is "surprisingly getting a lot of calls" directed towards 90 John. "Have we signed a lease? No. But we have a lot of groups that need 60,000 to 70,000 feet and some up to 150,000 square feet that are knocking on our doors. We are making appointments and busy making announcements that we own the building, and busy making projections," he added.

As the property is currently assessed at $15.5 million, the new assessment should fairly come in around $3.2 million if the city follows its 45 percent of value rule, which it has been reluctant to do when an arm's length transaction is not in its favor. Moinian is hopeful the city will do the right thing that will help carry the property until any conversion benefits come through.

Moinian is also not worried about filling the office property, which currently carries a 64 percent vacancy factor. "If the average is 75 percent [occupied], the 36 is half of the average and then we will use some creativity and the right marketing and management to attract the right tenants to surpass the average," he said. "If you take my entire portfolio, it has less than 2 percent vacancy. We will stay on top of this and make sure the building is occupied one way or the other."

Because of Mayor Rudolph Giuliani's Downtown incentive programs, a larger tenant can achieve multi-million dollar savings by renting Downtown. "There are also more flexible landlords," Moinian laughed. "Uptown, I might not give more than 60 days of free rent, but Downtown, you can twist my arm a little harder."

Cohen, speaking from a car phone in Israel, said it was due to Moinian's persistence that the deal came about, even though in the beginning he would not even consider a Downtown property. General Electric wanted a quick sale and while there was interest from other buyers, the Mayor's plan was stuck in a morass in Albany. Moinian, however, took the time to take a critical look at the property.

"He is one of the most thorough developers with hands-on management and goes himself through the building," said Cohen. "He checks it on his own and that is what made him different from the other buyers. He was trying to sort out and explore what the problems really were and was doing what nobody else was willing to consider doing, taking this property and coming out of this with the [residential] conversion. The benefits came through after the contract was signed," Cohen noted.

The deal was also supposed to be part of another Uptown transaction with GE. "The Uptown transaction was not done but he ended up filling in love with the project," added Cohen.

The contract was signed on a Sunday, the day before the Jewish holy day, Shevuos, while the deal finally closed just before Thanksgiving. "I got the lawyers and everybody and brought them in and signed," he said. "I had my romance with General Electric for eight months, so we had the due diligence and everything in place, so that was it."

After the closing, Moinian also received substantial offers from other investors, including one that Monday morning, bringing checks for up to $3.5 million more than what he paid for it.

But he has taken the project to heart and is going to close on at least two other Downtown properties in similar circumstances during 1996, he said. "It's like everybody woke up and the competition is getting fierce," said Moinian.