Worldwide Plaza is slipping through RXR and SL Green’s grasp. 

Cushman & Wakefield has replaced SL Green as the property manager of one of New York’s highest-profile distressed office buildings, according to court filings. 

The nearly 2M SF Midtown office tower is bleeding cash and has been at the center of an intensifying three-way battle for control between current owners SL Green and RXR, CMBS bondholders and Gary Barnett's Extell Development. 

In March, Hilco Global was appointed as the temporary receiver of the property after Goldman Sachs, Deutsche Bank and a trustee for CMBS bondholders — together responsible for a $940M senior mortgage — filed suit in January to foreclose on the property. 

A judge approved the transfer of management of the property away from SL Green by July 1. Goldman Sachs and Deutsche have been removed as plaintiffs, leaving Wilmington Trust representing the interests of bondholders invested in the CMBS loan.

As part of the transition, the receiver has established new bank accounts for the property, secured other insurance coverage, and hired a fresh tax consultant and leasing brokers. 

The 49-story tower has struggled since law firm Cravath, Swaine & Moore left its 617K SF there in 2024. An appraisal the next year slashed the property’s valuation by $1.4B.

Representatives for SL Green, RXR and Cushman didn’t immediately respond to Bisnow’s requests for comment. 

When asked about the REIT’s alternative strategy portfolio, including Worldwide Plaza, during SL Green’s second-quarter conference call on July 23, Chairman and CEO Marc Holliday didn't indicate that the asset’s day-to-day operations had been transferred to another firm.  

“In terms of what I can say sort of broadly is that they're good assets that, for different reasons, need to be recapitalized,” Holliday told analysts. “Worldwide Plaza, it was the move-out of the main tenant, Cravath.”

While SL Green's earnings statement pegged the building's occupancy at 61% as of June 30, the receiver's June report indicated the building was only 51% occupied.

Hilco executive Matthew Mason, the building's receiver, also wrote in a court filing that WNET is preparing to move out when its 95K SF lease expires at the end of the month. West Monroe Partners, whose 42K SF lease runs through 2030, has requested an extension of its security deposit reduction option, which previously expired on April 30. The building's monthly net operating income was negative $484K.

According to the report, default and eviction proceedings are in progress for three retail tenants: Body Factory, Bluedog Cookhouse and Bar, and a barbershop. Cushman is also reviewing a workout arrangement made with Baires Grill before the property was placed into receivership. 

Adding to SL Green and RXR's headaches, Extell Development has been trying to seize ownership of the property through a UCC foreclosure after the developer acquired the $190M senior mezzanine loan in October, about a year after the landlords defaulted on the debt. Extell then accelerated the amounts due and subsequently scheduled its own auction of Worldwide Plaza.

SL Green and RXR sued to block the auction, but Judge Andrea Masley declined the owners’ request for a preliminary injunction. They filed an appeal, and the case is ongoing. 

Worldwide Plaza’s capital stack also includes a $70M junior mezzanine loan that is in monetary default, according to a Securities and Exchange Commission filing by New York REIT Liquidating LLC, the limited liability company formed to dispose of the firm’s remaining assets. 

New York REIT continues to hold a 49.9% interest in the property. The joint venture between SL Green and RXR purchased its 48.7% stake in the property in 2017, at which point they stepped in as Worldwide Plaza’s exclusive property manager and leasing agent. The joint venture now owns 50.1% of the property.

The dispute has been closely watched on Wall Street, as bondholders in the single-asset CMBS debt stand to lose up to $488M, Bloomberg previously reported.