Charles Cohen Sheds Fifth Avenue Tower As He Tries To Fend Off Fortress
Vornado Realty Trust is paying a pretty penny for the office portion of 623 Fifth Ave. — and yet still getting it at a significant discount.
The Manhattan-based REIT agreed to pay Charles Cohen $218M for the 36-story, 383K SF building above the Saks Fifth Avenue, Vornado announced Monday.
Cohen, who has been embroiled in a legal battle with Fortress Investment Group over personal guarantees on loans tied to other properties, valued 623 Fifth at $480M last year, according to court filings reported by Crain’s New York Business. In 2023, it was valued at $712M.
The sale would pay off the $146M in debt attached to the building and generate approximately $70M in net proceeds for Cohen, according to Crain’s.
Cohen had previously proposed converting the office space into residential. Vornado has a different vision, planning to “completely reposition and redevelop” it into Class-A boutique office space, it said.
The building is 75% vacant and offers protected views of Rockefeller Center and St. Patrick’s Cathedral. Vornado expects to close the deal in September and complete the redevelopment in 2027.
In 2022, Cohen consolidated his debt through a $535M loan with Fortress. Roughly $187M of that loan is subject to a personal guarantee.
Since then, many of the offices in his 12M SF portfolio have lost tenants. In early 2024, Fortress sued Cohen for defaulting on his loan. The lender foreclosed on the assets, then began its campaign to enforce the guarantee, seizing both Cohen’s real estate holdings and personal assets. That included fine wines, art and luxury cars from his estate in France, The Wall Street Journal reported.
Cohen is also in the process of selling 622 Third Ave. and 3 E. 54th St., according to court records reported by Crain's. Three other properties in New York City and the Decorative Center of Houston are in foreclosure.
