Billionaire real estate mogul Charles Cohen is facing a financial setback as lenders move to foreclose on his Midtown office building at 3 East 54th Street. Court documents revealed that Forethought Life Insurance Co. and Kookmin Bank are claiming Cohen defaulted on $85 million in loans, with foreclosure possible, according to Crain's New York.
According to the lawsuit, Cohen did not meet the July 6 maturity date of the mortgages, leaving a growing debt now totaling an estimated $86.4 million with penalties included. The lenders' legal manoeuvers suggest they are keeping their options open, including the possibility of additional claims should an auction of the property not suffice to cover the overdue amount, the filing in Manhattan state Supreme Court details. Despite these challenges, in a statement obtained by Crain's New York, Steven Cherniak, chief operating officer at Cohen Brothers Realty Corp. said, "We are in the process of refinancing the mortgage on the property and intend to proceed with the current plan for redevelopment of the site."
Cohen's firm is facing financial difficulties, with a series of disputes highlighting struggles in managing his Midtown properties. This includes a March lawsuit by Fortress Investment Group over an alleged default on $534 million in loans, which Cohen counters by claiming the lender breached a repayment agreemen. Additionally, Cohen is reported to have been delinquent on over $600 million in loans across several properties, according to Commercial Observer.
3 East 54th Street, located near Fifth Avenue, is currently only 23% leased, according to the commercial real estate database CoStar. Cohen considered redeveloping the space, including plans to convert upper floors of another property at 623 Fifth Avenue into residential units.
The struggling Midtown building has had various tenants over the years, including a Ping Pong-themed club that closed in 2021. A decision from the city's Department of Buildings on whether to demolish the lower floors is still pending, leaving the building's future uncertain. Cherniak refused to comment on any redevelopment plans.
