Charles Cohen, whose realty company owns design centers in multiple states throughout the U.S., is reportedly facing a $544 million lawsuit from a major lender group. One media outlet reports that new litigation brought against the real estate executive could bring up the total debt to a minimum of $966 million.
Lawsuit Alleges Cohen Defaulted On Debt Linked To Seven Properties
The lawsuit against Cohen alleges that the real estate executive defaulted on debt that was associated with seven properties. This list of properties includes the Design Center of the Americas in Florida.
The new litigation is what reportedly brought the debt up to a minimum of $966 million. This increase occurred after the Cohen Brothers Realty firm became delinquent last year on its loans.
Other Properties Include NY Office Tower, Fort Lauderdale Hotel
Other properties that were tied to the debt spotlighted by the litigation include a Westchester redevelopment site and a New York office tower. According to The Real Deal, there was also a Fort Lauderdale hotel added to the list.
There were also three separate theaters in addition to the Florida design center added to the list.
Firm’s Lender Filed Suit Asking For $187 Million Judgment
The firm’s lender is reportedly a subsidiary of Fortress Investment Group. It filed the lawsuit on Monday.
Multiple reports confirm that the lawsuit asked for a $187 million judgment, which is Cohen’s payment guaranty. In addition, the lawsuit requests legal fees and interest to be covered along with default-related expenses.
Cohen Brothers Firm Senior VP: ‘We Want To Take The High Road’
Dave Cohen, the senior vice president at Cohen Brothers, opened up about the situation in an interview with The Real Deal. He stated that “we want to take the high record.”
Cohen added that “we don’t litigate in the papers.” He also stated that they “intend to defend” their firm against the litigation.
Fortress Executive Previously Claimed Firm Does Not Loans To Take Over Assets
Fortress executive Steven Stuart discussed the loans made by his firm during the New York Showcase event held last year by The Real Deal. He stated that his firm did not make loans with the objective of taking over assets.
Media outlets reached out to Fortress regarding the recent headlines about the Cohen Brothers firm and the pending lawsuit. However, a Fortress spokesperson declined the opportunity to comment on the record.
Cohen Brothers Firm Claimed It Was ‘Working With Lenders’ In October
The firm initially became delinquent back in October. Multiple reports confirm that the firm became delinquent on over $600 million for other loans that were backed by office properties throughout New York City.
Two of the properties in question were reportedly reviewed for a possible downgrade in September. The company claimed at the time that it started “working with lenders to bring any past-due loan payments current.”
Cohen Reportedly Dug Himself Out From Past Delinquencies
One report claims that Cohen was able to dig himself out of his past delinquencies. According to Morningstar, he brought the loans current in February.
The two properties in the spotlight that were previously considered for downgrade included the 805 Third Avenue property. The other property was the 3 Park Avenue building.
Payments Are Over 30 Days Late On $172 Million In Debt
Payments are reportedly more than 30 days late. That focuses on the $172 million in debt that was backed by the Decoration & Design building at 979 Third Avenue, based on loan data.
It was also reportedly backed by the 222 East 59th Street property.
Separate Property Tied $130 Million In Loans in Special Servicing
The property located at 750 Lexington reportedly generated $130 million in loans. One report shows that these loans were tied to the property through special servicing in November.
The Lenox Hill building is also home to an office for the Cohen Brothers’ firm.
WeWork Location Quit Paying Rent At Location In October
The Lenox Hill building is also home to a WeWork location. The Real Deal reports that the co-working firm stopped paying rent back in October.
However, according to the report, the co-working firm has not yet rejected its lease.
Cohen’s Financial Troubles Reportedly Spread From Class A Offices
According to the filing associated with his $534 million default filing, the bulk of Cohen’s troubles have apparently spread from his Class A offices. Cohen expressed a high appreciation of his ownership of those offices.
According to a Variety article from 2018, he referred to it as his “day job.” The article also stated that his real estate empire amassed over 12 million square feet of high-end property – most of which included luxury office buildings throughout Manhattan.
Cohen ‘Always Wanted To Be A Theater Chain Owner’
According to Variety, Cohen’s childhood dream did not necessarily focus on real estate. On the contrary, his personal passion and childhood dreams revolved around cinema.
He stated that he “always wanted to be a theater chain owner.” He currently owns Cohen Media Group, which is an independent theatrical distribution and production firm.
Cohen Purchased Landmark Theaters In 2018, Which Owned Multiple Locations
Cohen was able to turn his personal passion into a professional investment when he acquired Landmark Theaters in 2018. The company was essentially a bundled deal since it was the umbrella company of several locations.
Therefore, the Ritz V in Philadelphia and the Nickelodeon Theatre in Santa, Cruz California became Cohen-owned theaters as part of the deal. The acquisition deal also included Crest Cinema Center, which is located in Shoreline, Washington.
Cohen-Owned Theaters Suffered Financial Beating During COVID-19 Pandemic
The COVID-19 pandemic caused the Cohen-owned theaters to suffer major financial setbacks. For instance, the Nickelodeon Theatre did not make it through the first year of the pandemic in 2020.
According to Google, it is currently listed as “permanently closed.” Quite a few other theaters leased by Landmark within the Milwaukee, Dallas, and Bay Areas have also been forced to shut down over the past year for similar reasons.
