Charles Cohen’s tough year continues.
Cohen’s 750 Lexington Avenue is headed for foreclosure after its special servicer won a summary judgment last week. The owner had personally guaranteed the $130 million loan connected to the 31-story office building.
The loss follows Cohen’s defeat in his down-and-out battle with Fortress Credit over a $187 million personal guarantee, as well as distress across his portfolio.
The complaint in the 750 Lex case lists multiple events of default, including Cohen’s failure to pay taxes, provide financial statements, and certify that his net worth and liquidity are not materially less than they were when the loan was originated in 2015. Special servicer LNR Partners filed the case last May.
Neither Cohen Brothers Realty nor a lawyer for the defendants immediately responded to a request for comment.
The pandemic was the beginning of trouble at 750 Lex. The building, constructed in 1988 and known as 1 International Plaza, saw occupancy slipping. Zara left its retail space in 2022 along with several office tenants.
The asset had been part of the Cohen Brothers portfolio since the 1980s and houses the firm’s offices. But Cohen fell behind on payments in the summer of 2023, just before WeWork stopped paying rent at the property. When the failing co-work company declared bankruptcy, Cohen negotiated a lease amendment, shortening the term and agreeing to a revenue-sharing structure, according to Morningstar.
But that wasn’t enough to save revenue. By 2023, the building had seen a 74 percent drop in net operating income compared to when the loan originated, according to Morningstar. Occupancy, once 100 percent, had fallen to 69 percent.
In April 2024, the building saw its valuation slashed to $50 million, just 17 percent of what it was in 2015.
The judgment follows Cohen’s loss in a battle with Fortress Capital. After the lender sued Cohen last year for defaulting on a $534 million portfolio that he had guaranteed, he waged war against the creditor. He lost the properties that backed that deal after Fortress took them in what was among the largest UCC foreclosures of all time.
An appellate court decided in Fortress’s favor in February and a lower court entered the $187 million judgment against Cohen the next month.
Fortress has since accused the billionaire of shielding his assets, transferring his house in Greenwich and his 220-foot superyacht to a trust for his wife’s benefit last May. Cohen denied that the transfer was meant to shield the assets. Fortress estimated the Greenwich property is worth $20 million and the yacht $50 million.
Cohen’s personal net worth has sunk to $1.6 billion, according to Forbes, down 57 percent from its peak in 2023.
Cohen’s portfolio of eight Midtown office towers is also showing cracks. Occupancy at 805 Third Avenue has fallen to 56 percent, according to Morningstar. Outside New York, Cohen is facing potential foreclosure on a Houston property after allegedly defaulting on a $50 million loan from Ladder Capital Finance.
