SL Green, RXR and New York REIT Liquidating are facing the possible loss of Worldwide Plaza as the property heads to a UCC foreclosure auction. The auction for the controlling entity of the 1.8-million-square-foot Midtown office building at 825 Eighth Avenue is scheduled for January 15, according to Bisnow.
The building’s ownership received a default notice last September from the holder of $190 million in mezzanine debt, based on a Securities and Exchange Commission filing by New York REIT Liquidating. As of July, both senior and mezzanine debts were in default.
Goldman Sachs and Deutsche Bank provided $260 million in mezzanine financing for Worldwide Plaza. In addition to this, the property carries $940 million in commercial mortgage-backed securities (CMBS) debt originated by these two banks. Proceeds from the upcoming auction will be used to pay off the mezzanine debt and cover unpaid interest payments.
RXR and SL Green did not respond to requests for comment.
The property’s financial troubles intensified after Cravath, Swaine & Moore left its 617,000-square-foot space for Brookfield’s Two Manhattan West in September 2024. This move left Worldwide Plaza about 40 percent vacant, with occupancy dropping to 63 percent as of March according to Morningstar—down from 91 percent in 2023.
Nomura Holdings, currently the largest tenant at Worldwide Plaza, plans to reduce its leased space by 75,000 square feet before early 2027. Its remaining lease for approximately 630,000 square feet expires in 2033.
An appraisal conducted in April valued Worldwide Plaza at $345 million—a sharp decline from its $1.7 billion valuation in 2017 as noted in CMBS loan documents. This drop is expected to result in nearly $500 million in losses for CMBS bondholders associated with the property.
SL Green and RXR acquired a roughly 49 percent stake in Worldwide Plaza in 2015; New York REIT Liquidating holds the majority share.
Last month, DBRS Morningstar downgraded the rating on the CMBS trust holding $705 million of debt tied to Worldwide Plaza to junk status. According to Morningstar reports, negotiations between the special servicer and borrower over a potential loan modification are ongoing.
