A group of lenders has filed a foreclosure lawsuit targeting Worldwide Plaza, a high-profile mixed-use office property in New York, after the owners defaulted on a $940 million loan following the departure of a major tenant.
The complaint, filed by lenders Goldman Sachs and Deutsche Bank and bondholders in New York State Supreme Court in Manhattan, seeks to foreclose on the about 2 million‑square‑foot, 49-story mixed‑use office building at 825 Eighth Ave. The property is more than 50% owned by a joint venture between SL Green Realty and RXR, with the collateral also including retail space, a five-stage off-Broadway theater, a parking garage and amenity spaces, according to the filing.
The foreclosure move comes even as Manhattan last year posted its strongest office leasing year since at least 2019, highlighting the challenges facing older office buildings as well-resourced tenants gravitate toward newly built or recently renovated properties such as Manhattan West, industry professionals have said. Worldwide Plaza’s appraised value has slumped almost 78% to $390 million from $1.74 billion in 2017, CoStar data shows.
The $940 million commercial mortgage-backed securities loan was sponsored in 2017 by SL Green and RXR. The borrowers stopped making required interest, tax and other payments after law firm Cravath, Swaine & Moore moved out of the building in 2024. CoStar data shows the firm occupied about 620,000 square feet and relocated to Brookfield’s new Two Manhattan West tower near Hudson Yards.
Cravath had been a tenant at Worldwide Plaza for 35 years and accounted for about 45.5% of the property’s rental income with a roughly 30.1% leased footprint, the complaint said, adding that the lost revenue has not been replaced.
The borrowers’ “ability to make their debt payments took a significant hit” after the loss of the law firm, the filing said. Beginning in 2025, SL Green and RXR “repeatedly missed, or only partially made” required monthly interest payments. They also failed to fully fund operating expenses and did not pay more than $6.4 million in property taxes due in late 2025.
As of Feb. 6, the complaint said, $960.1 million was due, including principal, accrued interest, default interest, taxes and other costs.
"Our position on Worldwide Plaza has long been clear — while we moved the asset into our Alternative Strategy Portfolio over two years ago given that we attribute little to no value to the asset, we have a plan to revitalize the building and the capital to execute it,” an SL Green spokesperson said in an emailed statement to CoStar News, declining to elaborate. “This administrative filing is a procedural step and all parties are separately actively engaged and working collaboratively toward a resolution.”
RXR declined to comment to CoStar News.
PincusCo, which earlier reported the complaint, said the lawsuit comes weeks after a New York State Supreme Court justice in late January gave a go-ahead to the property’s mezzanine debt holder, Extell Development, to proceed with a foreclosure auction.
Built in 1989 and occupying the entire block bounded by Eighth Avenue, West 50th Street, Ninth Avenue and West 49th Street, Worldwide Plaza “is one of New York City’s most iconic buildings with a dominant presence on the Manhattan skyline,” SL Green said on its website. Designed by architect David Childs of Skidmore, Owings and Merrell, the property features a crown with an illuminated glass pyramid, nicknamed “David’s Diamond” after the architect, and is considered a notable example of postmodern skyscraper design, SL Green said.
Before the tower rose on the site that had been a parking lot since 1968, the block was home to the third Madison Square Garden, where the New York Rangers and New York Knicks once played, and where Marilyn Monroe famously sang “Happy Birthday, Mr. President” to President John F. Kennedy at his birthday party in 1962, according to SL Green.