Lenders File $940M Foreclosure Lawsuit Against SL Green, RXR

February 25, 2026

Office Featured Finance New York More News Northeast

Catch up on the latest development in the ongoing ownership dispute over one of New York City’s most notable distressed office buildings.

Worldwide Plaza—one of Manhattan’s iconic office towers located at 825 Eighth Ave.—is embroiled in several foreclosure lawsuits involving top lenders and some of New York City’s largest commercial real estate investors, who allegedly defaulted on a $940 million loan after a major tenant left the building.

Worldwide Plaza at 825 8th Ave. in Manhattan. *Image courtesy of Yardi Matrix*

Two of the lawsuits were filed late last week in New York State Supreme Court in Manhattan by lenders Goldman Sachs and Deutsche Bank and a trustee representing the CMBS bondholders against RXR and SL Green Realty, according to Bisnow. They are the majority owners of the 49-story, 1.8 million-square-foot Class A office tower and an adjacent 250,000-square-foot mixed-use property that includes several stores, the New World Stages Off-Broadway theater and a parking garage. New York REIT Liquidating LLC, which owns a 49.9 percent stake in the property, is also named in the suit.

Only SL Green has publicly responded to the suits, stating they have a plan to revitalize the building and capital to execute it. A spokesperson told Bisnow the lawsuit was a procedural step, and all the parties are working toward a resolution.

RXR and SL Green are also trying to stop a foreclosure auction by Extell Development, which owns about $190 million of the property’s mezzanine debt. The two owners sued Gary Barnett of Extell, who is trying to force a UCC foreclosure, a fast, non-judicial process that allows mezzanine creditors to foreclose on the borrower’s equity interests following a default. A judge recently rejected their attempt to block the auction that was set for Jan. 28. However, they have appealed against the decision and Extell has until March 4 to respond, according to The Real Deal.

It’s not clear how the UCC foreclosure, if it goes forward, could impact these latest lawsuits.

Ownership, loan secured in 2017

RXR and SL Green have owned the trophy tower and adjoining properties that span the entire block bounded by Eighth and Ninth avenues and West 49th and West 50th streets since October 2017, when the joint venture acquired the majority stake from New York REIT Liquidating LLC in a deal that valued the asset at $1.7 billion. Designed by David Childs of Skidmore, Owings & Merrill, the building was completed in 1989.

The joint venture secured a 10-year, fixed-rate $940 million loan originated by Goldman Sachs and Deutsche Bank in October 2017 for the office tower at 825 Eighth Ave. and the other properties at 313 W. 49th St. and 350 W. 50th St. The majority of this debt was split into a $705 million CMBS loan, with $235 million in a companion loan, according to the lawsuit.

The CMBS loan has been on a special servicer’s watch list since Sept. 13, 2024, according to Yardi Matrix data. The action came after anchor tenant Cravath, Swaine & Moore moved to Two Manhattan West near Hudson Yards. The law firm had leased 30.1 percent of the building’s rental square footage and provided approximately 45.5 percent of its rent roll, which has not been replaced.

Beginning in 2025, the mortgage borrowers repeatedly missed, or only partially made, their required interest payments by the monthly deadline, according to the lawsuit. For example, the suit alleges the borrowers failed to transfer sufficient funds to cover a more than $2.9 million interest payment due Dec. 8 and had insufficient funds to cover December and January taxes. In January, the lawsuit claims the owners did not pay $6.5 million of the $21.6 million tax bill. The suit also states there was not enough money to cover operating expenses in October and November.

Goldman, Deutsche and the bondholders want the court to place the properties in receivership and schedule a foreclosure hearing. The lawsuit states SL Green and RXR are required to pay any outstanding debts after a sale.

Complicating factors

This is where things get complicated. The property’s valuation dropped 80 percent from $1.7 billion in 2017 to $345 million in April, TRD noted.

The building is only about 63 percent occupied, according to Yardi Matrix data. That figure could decline significantly as early as 2027, when its largest remaining tenant, Nomura Holdings, will cut 75,000 square feet from its office space, according to TRD. The firm’s remaining 630,000-square-foot lease expires in 2033.