Mike Kohan Loses All Three Chicago Loop Towers He Bought

Mike Kohan has lost control of all three Chicago Loop office towers he bought in under two years, as a British lender’s enforcement action and two fresh New York lawsuits claiming more than $40 million in unpaid debt converge on his real estate empire, The Real Deal reported.

British lender Decama enforced its pledge over Kohan’s shares in Kohan Properties Ltd., the British Virgin Islands vehicle holding 131 S. Dearborn St. and 311 S. Wacker Drive, on Sept. 30, according to the outlet, then sold control of the entity on Oct. 8 to Amos Luzon Entrepreneurship and Energy Group and partner Alpha Gidurim for $6.4 million. In our Oct. 18 coverage of the Cook County deed for 131 S. Dearborn St., the former Citadel Center, we identified Kohan Retail Investment Group as the buyer in a deeply discounted purchase; that same tower sits inside the entity that just changed hands. A third tower, 33 W. Monroe St., which Kohan owned outright rather than through the BVI vehicle, has already slipped away separately: a receiver, Thomas Dwyer of Transwestern, was installed in a contractor’s lien foreclosure, and ground landlord Baptist Theological Union is pursuing its own eviction over unpaid lease costs.

Two New York lawsuits, filed a day apart this week in Nassau County Supreme Court, add to the pressure, together alleging more than $40 million owed. One, led by investor David Shaulian, alleges Kohan personally guaranteed over $32 million, signed a note acknowledging the debt in late September, then moved his equity in 16 joint-venture malls to a third party for $3.5 million days later, a transfer the suit seeks to unwind. The second, from Joseph and Ilan Cohen, alleges Kohan defaulted on a rabbinical-court settlement tied to malls in Georgia and New Mexico. Kohan did not respond to the outlet’s request for comment; a representative for Kohan Properties Ltd. declined to comment.

Why it matters

For anyone who bought discounted Loop office over the past two years, Kohan’s unwind tests what happens when a rollup’s debt outruns its capital. Lenders watching 131 S. Dearborn should note the dispute surfacing over it: Barzell Global, holding $12 million in preferred equity tied to the tower, asserts the change of control triggers immediate repayment, a position the new ownership disputes.

The numbers

Decama sold control of Kohan Properties Ltd., the vehicle holding both 131 S. Dearborn and 311 S. Wacker, for $6.4 million. Kohan had bought 311 S. Wacker for $45 million, an 85% plunge from its prior trade. The 33 W. Monroe receiver’s first report found that tower 78% vacant, uninsured since December and behind on property taxes.

What’s next

A person familiar with the deal told The Real Deal that Amos Luzon remains well capitalized and is likely to keep the 1.5-million-square-foot Dearborn tower, betting on a lease-up funded by fresh capital rather than a quick resale. At 33 W. Monroe, the receiver’s next report and the eviction case will show whether the tower gets a new owner or sits vacant longer. Barzell Global’s repayment claim against 131 S. Dearborn is unresolved and worth watching for lenders assessing similar preferred-equity stacks elsewhere.