We focus on one large NYC transaction this month.
Charles Cohen’s $141m sale of a distressed Midtown Manhattan office, 3 East 54th Street, to Vornado. The deal highlights the city’s post-pandemic office woes.
Although there has been a lot of positive noises being made about back to office, Kastle Systems’ latest NYC metro badge swipe data shows occupancy for mid-January 2026 at 48-50%, versus pre-COVID baselines of 60-65%. Likewise, Manhattan’s office availability rate was down from 18% a year ago to 15% by the end of 2025. But this compares to a pre-pandemic 2019 rate of just 11.7%.
The deal also shows how lenders’ woes can multiply. In 2022, Fortress Investment Group extended a $500m loan to Cohen Brothers Realty, secured by properties including this one. Cohen defaulted in 2024, leading to foreclosure that failed to cover the debt. An appeals court upheld Fortress’s claim on Cohen’s $187.2m personal guarantee.
On the other hand, the deal could also be seen as a testament to the opportunities in distressed assets. Vornado Realty Trust acquired the property’s mortgage in two tranches during 2024-2025, with the balance accruing to $107m, including default interest. Cohen Brothers held a 63% stake, valued internally at $109m net.
There was talk of an undisclosed buyer, but funds never arrived, collapsing the deal. On 7 January 2026, Vornado bought the site for $141m— a $47m shortfall— crediting the $107m debt toward the price, yielding a $30-plus million surplus for Cohen to apply against the judgment (after the parallel $218m sale of 623 Fifth Ave., which netted only $30m to Fortress).
Some might call this a trophy property. It is a 19-story gem designed by Emery Roth, a tower of some 300,000sqft in Manhattan’s ‘Plaza District’ (between Fifth and Madison Avenues). Yet the site appears to have no future as an office property. Vornado talks of a “demolition-ready” asset, noting it sits on 18,400sqft land zoned for 232,500sqft ‘as-of-right redevelopment’, likely residential or hotel.
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