Default is looming over the Cohen Brothers Realty’s International Plaza tower, where a CMBS loan on the building was transferred to special servicing.
The balance of the loan on the Plaza District office at 750 Lexington Avenue is $126.8 million, according to Trepp data reported by the Commercial Observer. Citigroup issued the loan in 2015, which is facing default three years ahead of its maturity date.
The loan is split between two conduit deals, part of a $130 million package. Cohen Brothers hit 30 days of delinquency in September, triggering the special servicing move. The developer has been delinquent seven times and the loan was previously placed in special servicing last July; the loan matures in October 2025.
The 750 Lexington Avenue property was 71 percent leased in 2021 and has struggled to generate cash flow because of the pandemic, as well as the June 2016 departure of Locke Lord. The law firm abandoned about 119,000 square feet, nearly one third of the building’s rentable space.
The 31-story property was built in 1986 and spans 382,000 square feet.
One of the largest tenants is WeWork, which signed a 15-year lease for 111,000 square feet at the beginning of 2018. The asking rent for the space was $80 per square foot. The building was 95 percent leased after WeWork inked its deal.
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Charles Cohen has faced issues with his loan payments in the past. Near the start of the pandemic, the real estate scion fell at least a month behind on payments for four Manhattan properties: the Decoration & Design Center, 465 Park Avenue, 3 Park Avenue South and 805 Third Avenue.
At the time, Cohen owed about $1 billion in commercial mortgage-backed securities across its vast portfolio. The billionaire landlord downplayed the problems at the time, attributing the delays to “timing issues” from tenants who were behind in paying their rent directly to lenders.
— Holden Walter-Warner