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DCOTA refinances, avoids foreclosure
The design center was facing a $172.9M foreclosure lawsuit
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“DCOTA’s mortgage has been successfully refinanced and all foreclosure litigation has been withdrawn and settled,” Charles Cohen of Cohen Brothers Realty Corp.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.
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.