Charles Cohen’s Midtown East office building is continuing its valuation freefall.
The 31-story office building at 750 Lexington Avenue was recently valued at just $41 million — less than 14 percent of its $300 million valuation a decade ago, according to Morningstar Credit. It’s the latest blow to the property after a lender won a judgement in a foreclosure case on the building last month. Cohen, a billionaire, personally guaranteed a $130 million loan on the property in 2015.
750 Lex was constructed in 1988, at the corner of Lexington Avenue and East 59th Street, and is also called 1 International Plaza. Cohen Brothers Realty owned the building for decades and kept offices there.
But things started to go south during the pandemic as occupancy began to slip. Both its retail tenant, fashion brand Zara, and office tenants vacated the space in 2022. Cohen fell behind on payments.
Then in 2023, beleaguered coworking company WeWork stopped paying rent. The building, which was once fully leased, fell to 69 percent occupancy. Net operating income was a quarter of what it was when the loan originated.
When WeWork declared bankruptcy, Cohen negotiated a lease amendment that shortened the term and tied rent to the revenue from the office, according to Morningstar. But the next month, the building’s valuation dropped to $50 million.
As of March, expenses have overtaken revenue at the office. Net operating income, which does not include debt service, is in the red at -$744,915, according to Morningstar.
Special servicer LNR Partners filed a foreclosure case against the property last summer and won summary judgement last month. Cohen failed to pay taxes on the property, provide financial statements, and certify that his net worth and liquidity have not fallen, LNR said in its complaint. The servicer is pursuing foreclosure at the same time as it tries to work out the loan with the borrower, according to information provided by Morningstar.
Neither LNR Partners nor an attorney for Cohen in the foreclosure case immediately responded to a request for comment.
Elsewhere, Cohen has been waging war with Fortress Capital. After the lender sued Cohen last year for defaulting on a $534 million portfolio that he had guaranteed, the firm won a $187 million judgement in February.
Cohen’s personal net worth has sunk 57 percent since 2023, according to Forbes. It is now estimated at $1.6 billion.
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Creditors close in on Charles Cohen’s 750 Lex
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