Foreclosure Filed Against Manhattan’s Worldwide Plaza
A $940M loan default, a 78% value drop, and a Midtown icon caught in the office reset.
Nina Dale
February 25, 2026
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Good morning. Even as Manhattan posts its strongest leasing year since 2019, distress is mounting at older office towers. Worldwide Plaza is now facing foreclosure after losing its anchor tenant and defaulting on a $940M loan.
Today’s issue is sponsored by Crexi Auction—Silicon Valley hotel opportunity now open for bids.
Market Snapshot
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Value Collapse
Foreclosure Filed Against Manhattan’s Worldwide Plaza
Worldwide Plaza's appraised value has fallen nearly 80% from $1.74 billion in 2017. (CoStar)
Lenders have moved to seize Worldwide Plaza after its owners defaulted on a $940M loan tied to the high-profile Midtown office tower.
A skyline staple: Goldman Sachs, Deutsche Bank and bondholders filed a foreclosure complaint in New York State Supreme Court against the 49-story, 2 MSF tower at 825 Eighth Ave., where the loan balance has climbed to $960.1M, including interest, default charges and more than $6.4M in unpaid taxes.
Value reset: The tower’s value has fallen nearly 78%, to $390M from $1.74B in 2017, highlighting the sharp repricing of older office assets. The 2017 CMBS loan was sponsored by majority owners SL Green and RXR.
Tenant fallout: Trouble escalated after Cravath, Swaine & Moore left 620,000 SF in 2024 for Two Manhattan West. The firm made up about 30% of leased space and 45.5% of rent, and borrowers began missing payments in 2025 as the income loss went unreplaced.
Complicating factors: The foreclosure action follows a January court decision allowing mezzanine lender Extell Development to proceed with its own foreclosure auction. The collateral includes office space, retail, a five-stage off-Broadway theater, a parking garage and amenity areas.
Owner response: SL Green said it moved the asset into its Alternative Strategy Portfolio, assigning it little value, but has a revitalization plan and capital in place. The firm called the lawsuit procedural and said resolution talks are ongoing. RXR declined to comment.
➥ THE TAKEAWAY
When anchors exit: Even as Manhattan leasing rebounds, older office towers without major upgrades face a harsh reality: when anchor tenants leave, values can fall quickly, reshaping ownership and capital stacks.
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Around New York
➥ A New York appellate court ruled that commercial landlords can secure early court-ordered rent payments from defaulting tenants while litigation is ongoing.
➥ New York’s wealthiest renters are locking in ultra-luxury leases at record prices, reinforcing strong demand at the top of the residential market.
➥ Mayor Mamdani has proposed a 9.5% property tax increase to close a $5B budget gap, drawing swift opposition from local leaders and business groups.
➥ Verizon is backing away from previously announced plans for a new Manhattan HQ, signaling continued caution around large-scale office commitments.
➥ Mamdani appointed six new members to the Rent Guidelines Board, positioning it to advance his rent-freeze agenda for stabilized apartments.
➥ New York’s largest pickleball club is set to open in a former Midtown theater once graced by Frank Sinatra.
➥ Core Club is fighting eviction at 711 Fifth Ave. as landlord Michael Shvo challenges its financial claims amid a $3.5M rent default dispute.
➥ Midtown Manhattan’s office vacancy remains elevated despite steady leasing activity, as newer and renovated buildings outperform aging stock.
Follow the Money
| MULTIFAMILYCENTRAL NEW YORK New York launched a $150M public-private fund to finance 2,500 workforce housing units across Central New York. |
| MULTIFAMILYBRONX The first project to undergo NYC’s new fast-tracked housing review process has officially begun, testing the city’s push to accelerate development approvals. |
| OFFICEMIDTOWN SL Green signed 110,000 SF of new leases at 1185 Avenue of the Americas, reinforcing demand for well-located, upgraded Midtown office space. |
| OFFICETRIBECA Olshan Properties secured a $40M refinancing for its 97%-leased, 184K SF office building at 99 Hudson St. in Tribeca. |
| OFFICEPLAZA DISTRICT Olayan increased total borrowing on its 96%-leased 550 Madison tower to $800M with an additional $230M from ING through expanded debt. |
| MULTIFAMILYFINANCIAL DISTRICT A recently acquired Lower Manhattan office building is slated for conversion into roughly 300 residential units, advancing the office-to-resi trend downtown. |
| INDUSTRIALQUEENS Terreno Realty acquired a New York City industrial asset for $92 million, signaling sustained investor appetite for urban logistics properties. |
| OFFICEGRAND CENTRAL JPMorgan Chase renewed its long-term lease at One Grand Central Place, delivering a stability win for ESRT in Midtown’s competitive office market. |
📈 CHART OF THE WEEK
Manhattan’s rent growth has significantly outpaced the national average over the past year, with NYC posting a 5.7% annual increase—well above U.S. trends.
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