DCOTA refinances, avoids foreclosure

The design center was facing a $172.9M foreclosure lawsuit

Charles Cohen, Design Center of the Americas
Charles Cohen, Design Center of the Americas

Design Center of the Americas, the high-end showroom in Dania Beach, avoided foreclosure after Cohen Brothers Realty Corp. reached a financial settlement with its lender.

The lawsuit ends a long, drawn-out legal battle over the property’s debt, and puts to rest a $172.9 million foreclosure lawsuit from Wells Fargo, acting as a trustee for lender GE Commercial Mortgage Corp.

Property records show that a company tied to Fortress Investment refinanced the mortgage for $112 million on Friday.

“DCOTA’s mortgage has been successfully refinanced and all foreclosure litigation has been withdrawn and settled,” Charles Cohen of Cohen Brothers Realty Corp. said in a statement. Cohen remains 100 percent owner of the property, according to a release.

The 782,986-square-foot property at 1855 Griffin Road was built in 1985. Originally geared to high-end designers, architects and decorators, the property converted much of its design center space to office property, leasing 100,000 square feet for the headquarters of online pet retailer Chewy.com.

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But the property has struggled to attract other tenants. It was only 64 percent occupied in the third quarter of 2018, the financial data provider Trepp reported. A spokesperson for DCOTA said the property is now 80 percent occupied.

In June, an appraisal of the property was cut by more than half from $250.35 million to $115 million.

As occupancy remained low, the property faced challenges with its two loans. In December, an $86.5 million loan was marked delinquent, according to Trepp. Then in February, a second loan of $86.5 million was marked delinquent.

DCOTA’s troubles with its debt date back to 2012, when a note went into special servicing and terms of the loan had to be modified. The loan’s interest rate was lowered and its maturity date was extended for a two-year term that ended in August 2017. It was then later extended until March 2019.

New York-based Cohen Brothers Realty Corp. is a commercial real estate development and management firm with a portfolio of over 12 million square feet of office towers and design center buildings. Its portfolio includes Manhattan’s renowned Decoration & Design Building, Southern California’s Pacific Design Center in West Hollywood and Decorative Center Houston.