Charles Cohen is shedding more Midtown Manhattan real estate as lenders tighten the screws on the troubled landlord.
Days after agreeing to sell 623 Fifth Avenue, the owner struck a deal to unload 3 East 54th St. for $188 million, according to a statement filed in court last week by David Fogel, executive vice president at Cohen Brothers Realty.
The buyer of the 19-story, 300,000-square-foot tower wasn’t named, but the funds were said to be arriving by international wire, according to the filing reported by Crain’s.
The deal breaks down to $627 per square foot. The property carried an $85 million mortgage and was valued internally at a net $109 million. Cohen only owned a 63 percent stake in the building.
The agreement marks another step in Cohen’s scramble to raise cash after a New York judge ordered him to repay $187 million personally guaranteed to Fortress.
The sale would cover only part of Cohen’s obligations. The developer — who still controls 12
million square feet of mostly Midtown office stock — was valued at $2 billion at the end of last year, nearly $1 billion less than the prior year. His financial disclosures pegged his liquid assets at $200 million, including $130 million in cash.
The transaction mirrors the haircut Cohen took on 623 Fifth. That Class A tower, once internally valued at $712 million, sold last week for $218 million, generating about $70 million in proceeds after debt payoff. Cohen’s attorneys told the court the two sales combined could yield $100 million toward repaying Fortress — barely half of what he owes.
Fortress filed a response to the pair of sales, saying the deals alluded to a larger issue with his asset stock.
“While the announced sale of two properties is promising in terms of creating liquidity with which to pay down Fortress’ Judgment, it also confirms a troubling fact: that Mr. Cohen has wildly overstated the value of his real estate portfolio,” the lender said in an Aug. 29 filing.
The 54th Street property may not remain an office tower much longer. Cohen’s lawyers described it as a development site, suggesting a buyer could raze it for a hotel or residential project.
CBRE is also shopping Cohen’s 1 million-square-foot 622 Third Avenue, which carries a $400 million mortgage, with five prospective buyers reportedly circling.
For Fortress, the fire sales mark progress in a year-long fight to recoup more than $500 million it says Cohen defaulted on. The private equity giant has accused him of shifting assets — including his Connecticut home and 220-foot yacht — into his wife’s name, allegations Cohen denies.
Whether Cohen can unload enough of his portfolio to satisfy Fortress remains to be seen.
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