The Real Deal New York

Cohen Brothers sue Sol Goldman Investments over alleged ground-lease termination threat

The firm developed the 35-story office tower at 475 Park Avenue South

March 23, 2016 02:09PM


From left: Charles Cohen and 475 Park Avenue South

Cohen Brothers Realty hit Sol Goldman Investments with a lawsuit, claiming that the firm is threatening to terminate their ground lease at 475 Park Avenue South early.

In late 1967, the brothers — Sherman, Mortimer and Edward Cohen — signed an 80-year ground lease with a limited liability company affiliated with Sol Goldman, the late real estate mogul. In 1970, the Cohen Brothers developed the 35-story office tower with over 399,000 square feet of office space in Murray Hill and have invested $40 million to upgrade it.

In a complaint filed in New York State Supreme Court last Friday, the Cohen Brothers allege Sol Goldman Investments, the property’s land owner, threatened to terminate the ground lease, which has 21 years left, as a way to “extract additional payment” from the firm, the Commercial Observer reported.

The lease expires April 20, 2047 with an option to renew it for 25 more years, according to the Observer.

The real estate development firm has received a temporary restraining order to block Sol Goldman’s descendants from terminating the lease.

Both the Cohen Brothers and Sol Goldman Investments are trying to refinance mortgages. The Cohen Brothers are looking to refinance their leasehold mortgage while Sol Goldman Investments is seeking to refinance its fee mortgage, according to court documents.

The companies exchanged a series of requests to certify that the lease was in good standing to refinance the respective mortgages. Sol Godman sent an estoppel certificate that alleged there were six major outstanding liens and violations on the lease, which Cohen Brothers said had been rectified.

According to court documents, the defaults “are nothing more than an improper effort to extract concessions from tenant rather than to enforce any legitimate rights landlord has under the lease.”

In 2013, The Real Deal reported Solil Management, which manages the real estate assets of the late Goldman, had Manhattan holdings worth an estimated $6 billion. The Goldman estate has been sued by 18 of its ground-lease holders since 2003, who all claimed the firm threatened to terminate their leases over trivial property violations, according to state court records. [CO]Dusica Sue Malesevic