Moinian investing up to $180M for stake in Flatbush resi project

Solomon Feder, Israel Neiman are developing a 487-unit rental at 123 Linden Blvd.

123 Linden Boulevard and Joseph Moinian (Credit: Moinian Group)
123 Linden Boulevard and Joseph Moinian (Credit: Moinian Group)

The Moinian Group is taking a nearly 50 percent stake in developer Solomon Feder’s conversion of a Brooklyn nursing home into a 487-unit rental building.

Joseph Moinian’s firm is lending Feder up to $160 million for the development at 123 Linden Boulevard, according to documents filed on the Tel Aviv Stock Exchange, where Moinian raised $361 million in 2015. In exchange for a 49.9 percent stake, Moinian will also invest up to nearly $20 million in the project, one of the largest in Flatbush, the documents said.

Already, Moinian gave Feder and partner Israel Neiman $23 million in February to refinance existing loans on the property, which they bought last year from the New York Congressional Center for Community Life. That $23 million is included in the $160 million that they’re able to borrow. Moinian’s loan has a floating interest rate of 8.25 percent and covers a period of 42 months. TASE documents state that Feder and Neiman can’t take on additional lenders for the duration of the loan.

The agreement also comes with a noncompete clause, stipulating that 123 Linden’s developers won’t develop a residential building with more than 100 units within a half-mile radius of the project until 2025. If they do, Feder and Neiman agreed to give Moinian the right of first offer to join the project.

Moinian and Feder did not immediately comment on the agreement.

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Feder and Neiman paid $18.5 million for 123 Linden in 2016 and subsequently filed plans to demolish the existing four-story building, located between Rogers and Bedford avenues.

Plans for the new building, meanwhile, have grown several times.

Initially conceived as a seven-story building with 57 apartments, filings with the city’s Department of Buildings last year detailed 384 units across 376,507 square feet. Now, according to the TASE documents, the project will have 467 units across 470,100 square feet. It will also have parking and a community facility.

Despite the disclosure of its investment in 123 Linden in TASE documents, it’s unclear if Moinian is investing proceeds of its 2015 bond issuance at 123 Linden. The Moinian Group also launched a real estate investing platform last year, which completed $300 million in transactions to date, the company recently said.

Moinian previously dipped into its TASE proceeds when it gave developer David Marx a $65 million land loan to fund construction of a 399-room Marriott Courtyard in the Hudson Yards neighborhood.  That loan has since grown to $90 million, according to a year-end report Moinian filed with TASE.

Moinian also used bond proceeds to fund a $20 million loan at 245 Fifth Avenue in NoMad, which it co-owns with Joseph Sitt’s Thor Equities. Last year, Moinian and Thor refinanced the building with a $160 million loan from AIG Global Real Estate.