News Summary
In New York City, Charles Cohen is selling the 36-story office building at 623 Fifth Avenue to Vornado Realty Trust for $218 million, significantly less than its previous valuations. This sale comes as Cohen faces financial pressures, needing to generate $200 million for creditors. Vornado plans to redevelop the building into a Class A boutique office property, costing around $200 million. Cohen’s financial difficulties extend beyond this sale, as he seeks to offload other properties amid ongoing legal and financial challenges.
New York City – In a significant transaction reflecting ongoing financial challenges, Charles Cohen is set to sell the 36-story office building located at 623 Fifth Avenue to Vornado Realty Trust for $218 million. This sale price is notably less than half of the building’s assigned value, which Cohen had pegged at $712 million in 2023 and $480 million in the previous year.
Cohen’s recent financial pressures necessitate the generation of nearly $200 million in cash to meet obligations to creditors, predominantly Fortress Investment Group. He currently faces a significant legal judgment of $187 million due to personal guarantees tied to loans exceeding $500 million. Given these financial strains, the decision to sell 623 Fifth Avenue came as Cohen’s broader portfolio has struggled, with the property itself reporting a high vacancy rate of 75%.
Vornado Realty Trust has announced plans to divert from Cohen’s original vision for the building, which included converting its office space into residential units. Instead, Vornado aims to completely reposition and redevelop 623 Fifth Avenue into a premier Class A boutique office property by 2027. The projected cost for the renovation and leasing is estimated at around $200 million.
The sale of the building is anticipated to generate approximately $70 million in net proceeds for Cohen, following the settlement of the building’s existing mortgage of $146 million as of the end of 2024. However, Cohen’s financial woes spread beyond this single transaction; he is also seeking to offload other properties, including 622 Third Avenue and 3 East 54th Street, while multiple additional holdings face potential foreclosure. These include notable addresses such as 750 Lexington Avenue, 465 Park Avenue, and a property located in Houston.
Despite Cohen’s recent financial difficulties, his 2024 financial statement indicates a net worth of $2 billion, which reflects a significant decline of $900 million compared to the prior year. Allegations of financial misconduct, particularly asset shielding, have surfaced as Fortress Investment Group accuses Cohen of transferring ownership of significant assets—specifically his Connecticut residence and yacht—into his wife’s name.
The building’s high vacancy rate of 75% adds to Vornado’s challenges, as the current office environment in New York remains highly competitive, especially with the growing trend of remote work. The projected plans for the redevelopment into high-quality office space aim to attract new tenants and revitalize this portion of Fifth Avenue.
Neither Cohen Bros. Realty nor Fortress Investment Group has provided public comments regarding the ongoing sale processes and Cohen’s broader financial situation. This transaction encapsulates the complexities and challenges currently facing commercial real estate amidst changing demand and market conditions.
As the sale moves forward, both parties will undoubtedly keep a close watch on market dynamics, tenant demand, and the long-term prospects for commercial spaces in an ever-evolving urban landscape.
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Additional Resources
- The Real Deal
- Crain’s New York
- Bisnow
- Crain’s New York
- Hoodline
- Wikipedia: Commercial Real Estate
- Google Search: Charles Cohen real estate
- Google Scholar: Charles Cohen real estate
- Encyclopedia Britannica: Real Estate
- Google News: Charles Cohen real estate
Author: STAFF HERE NEW YORK WRITER
NEW YORK STAFF WRITER The NEW YORK STAFF WRITER represents the experienced team at HERENewYork.com, your go-to source for actionable local news and information in New York, the five boroughs, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as New York Fashion Week, Macy's Thanksgiving Day Parade, and Tribeca Film Festival. Our coverage extends to key organizations like the Greater New York Chamber of Commerce and United Way of New York, plus leading businesses in finance and media that power the local economy such as JPMorgan Chase, Goldman Sachs, and Bloomberg. As part of the broader HERE network, including HEREBuffalo.com, we provide comprehensive, credible insights into New York's dynamic landscape.
