New York real estate mogul Charles Cohen isn’t having a good year, or a good fortnight, for that matter.
The billionaire faces another foreclosure filing, marking the second such action against his properties in just two weeks. The latest filing, initiated by the special servicer on a $130 million CMBS debt, targets Cohen’s 750 Lexington Avenue property, a core asset in his real estate portfolio.
Cohen, whose net worth is estimated at $3 billion by Forbes, has been struggling with debt payments on the property since the summer of 2022. The complaint cites multiple events of default, including failure to pay taxes, provide financial statements, and certify his net worth and liquidity.
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The 28-story office tower, known as 1 International Plaza, has been grappling with the aftermath of the COVID-19 pandemic. Zara, a major retail tenant, vacated the space in 2022, and office tenants have been increasingly dissatisfied with the floors above. Occupancy rates have plummeted from 71% in 2021 to a mere 66% by December 2022, severely impacting the property’s cash flow.
Compounding Cohen’s troubles, WeWork, a key tenant, stopped paying rent in October 2023, prompting the loan to be sent back to special servicing. A recent reappraisal slashed the property’s valuation by a staggering 83%, from its 2015 value to just $50 million.
Cohen Brothers senior vice president Dave Fogel said in March that the company is engaged in positive dialogue with the servicer. “Things aren’t as bad as they’re made out to be,” he said. “We hope to have some good things to report.”
Recent developments, such as WeWork resuming rent payments as of last month and assuming its lease at the building, offer a glimmer of hope for Cohen.
The foreclosure follows Cohen in April seeing an affiliate of Fortress Investment Group filing a lawsuit related to a default on a $533.6 million loan that covered two properties in Fort Lauderdale, Florida, and three properties in New York. That filing seeks to recover $187.25 million from Cohen as part of a personal guarantee that he provided on the loan. Fortress acquired the loan initially in 2020 in an effort to resume a foreclosure lawsuit brought forward by a previous lender, before expanding the loan two years later in 2022.
Information for this story was found via The Real Deal, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
