After a legal scrap that lasted the better part of a year, it finally happened: The Design Center of the Americas went up for auction. In a gray Manhattan conference room, the process was completed in less than 20 minutes with a dry, bureaucratic efficiency. There were no qualified outside bidders, and the property now changes hands to Charles Cohen’s lender, Fortress Investment Group, for a hammer price of $76 million.
The auction included additional assets owned by Cohen, though Fortress ultimately only chose to purchase three of them—the Le Méridien Hotel Dania Beach in Florida, for $30 million; his Doral golf club development in Westchester, New York, for $37.7 million; and British film distribution company Curzon for $5 million. Altogether, the sale generated $148.7 million, all of which will go toward reducing Cohen’s nearly $600 million debt to Fortress.
The auction, originally scheduled for July of this year, was postponed by a legal dispute. According to the auctioneer, Matthew Mannion, the marketing for the sale generated interest from 127 potential bidders who signed NDAs, 86 of whom got a look at a data room containing information on the assets. Ultimately, they either didn’t meet the necessary criteria to bid or simply weren’t interested. Fortress purchased the assets in a credit bid, meaning they were able to apply the money owed to them to make “commercially reasonable” offers.
Fortress has not indicated what it plans to do with the DCOTA. According to documents unearthed in the case, the building is operating at a yearly loss of $2.7 million after servicing its debt. Tenants of the building, speaking to Business of Home on the condition of anonymity, have said there has been little communication from their landlord on the issue of a possible sale.
As for Cohen—who also owns the Pacific Design Center in Los Angeles, the Decorative Center Houston, and the Decoration & Design Building in New York—the next chapter also includes many unknowns. He personally guaranteed $187 million against the original loan, meaning that, in addition to pursuing further action against Cohen Brothers Realty, Fortress can look to sue him directly to recoup their losses—though the billionaire landlord’s lawyers are fighting the issue on appeal.
Representatives for Fortress and Cohen Brothers Realty did not respond to a request for comment by press time.
