SL Green, RXR Secure $940M CMBS Workout for One Worldwide Plaza

One of New York City’s prime office buildings is moving out of special servicing after several months in delinquency. 

The $940 million commercial mortgage-backed securities (CMBS) loan on One Worldwide Plaza — a 2 million-square-foot office tower at 825 Eighth Avenue — has been modified, allowing the sponsorship team that includes SL Green (SLG) and RXR to return the loan to its master servicer. 

SL Green and RXR acquired a 49.9 percent ownership stake in the property in 2017, when they valued the 35-year-old Postmodern brick tower at $1.7 billion. New York REIT Liquidating retains the 50.1 percent ownership of Worldwide Plaza, according to Crain’s.

“Worldwide Plaza is an iconic, well-located asset, with an exceptional block of space available at the top of the building that will be in high demand as availability for big blocks of space continues to tighten,” said a spokesperson for SL Green.

The modification was first highlighted by Morningstar Credit, which added that the sponsorship team will use loan reserves to fund operating expenses and debt service shortfalls. The loan matures in November 2027. 

The building’s $940 million single-asset, single-borrower (SASB) mortgage — WPT 2017-WWP & multiple conduits — includes pari passu senior notes held in GSMS 2017-GS8, GSMS 2017-GS9, BMARK 2018-B1 and BMARK 2018-B2. There is an additional $260 million in debt across three mezzanine loans. 

The massive SASB CMBS loan was first transferred to special servicing in September 2024 following a monetary default, as One Worldwide Plaza began feeling the effects stemming from the August 2024 loss of tenants Cravath, Swain & Moore, which had occupied 30 percent of the building. Moreover, tenant Nomura, occupier of 34 percent of the leasable area, holds an early termination option for January 2027. 

The departure of Cravath triggered a cash-trap provision that froze roughly $22 million that had been reserved for tenant improvements — almost all of the money was instead used by the sponsors to fund financial shortfalls in the ensuing months, according to Morningstar. 

“Prior to Cravath’s departure, [the building] …. had maintained occupancy rates above 90 percent. Cash flow, however, had been declining largely due to increased expenses,” wrote Morningstar Credit. “It appears that the reserves have already been applied to fund the shortfalls, as the reserve balance as of this month was $1.9 million.”

Today, occupancy stands at roughly 60 percent, per Crain’s.  SL Green’s spokesperson added that the mortgage loan is now current and that the existing reserves “service the present needs of the property while we develop a robust repositioning plan.”

RXR did not respond to requests for comment on the modification. 

During an October 2023 interview, SL Green CEO Marc Holliday told CO that sponsorship was working on redevelopment plans for One Worldwide Plaza and planned to make the 500,000 square feet of office space once occupied by Cravath at the top of the building “as attractive as can be to the market.” 

“It was kind of a state-of-the-art building when it was constructed back in the 1980s,” explained Holliday, “And I think, with a little attention paid to modernizing and creating some amenities in the building, it will be competitive.”

Brian Pascus can be reached at bpascus@commercialobserver.com