Cohen Brothers Facing Foreclosure at 3 East 54th Street Amid High Debt

After a year of financial woes for Charles Cohen, the developer is facing even more challenges with a potential foreclosure at his office building at 3 East 54th Street.

Lender Forethought Life Insurance Company recently filed a lawsuit in New York Supreme Court against Cohen Brothers Realty for allegedly defaulting on $85 million worth of loans at the property since July, according to Crain’s New York Business, which first reported the news.

Cohen Brothers, which had been planning a major redevelopment at the 19-story Midtown office tower, said the company is working to resolve the financial issues, Crain’s reported.

“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,” Steven Cherniak, Cohen’s chief operating officer, told Crain’s.

Cohen’s exact plans for the property are unclear. Spokespeople for Cohen and Forethought did not immediately respond to requests for comment.

The news of the foreclosure comes as Cohen has seen his portfolio struggle immensely since the COVID-19 pandemic.

In October, the $182 million commercial mortgage-backed securities (CMBS) loan secured by Cohen’s 3 Park Avenue was transferred to special servicing after the landlord failed to make payments and saw leasing drop at the 41-story office building.

Cohen has also been delinquent on loans at 222 East 59th Street, 750 Lexington Avenue and 979 Third Avenue — all while lender Fortress Investment Group has pursued a $534 million Uniform Commercial Code foreclosure against Cohen for failing to repay loans across several states, Commercial Observer reported.

At 623 Fifth Avenue, another one of Cohen’s poor-performing office buildings, the developer has proposed converting the upper floors of the 38-story Midtown tower into 172 residential units, Crain’s reported.

Isabelle Durso can be reached at idurso@commercialobserver.com.