Inside the Legal Brawl Over Worldwide Plaza

What started as a distressed office situation at Worldwide Plaza has quickly escalated into a high-stakes showdown among New York real estate titans.

This week, a New York Supreme Court judge temporarily halted Gary Barnett’s planned UCC auction tied to Worldwide Plaza, the 1.8 million square foot Midtown office complex at 825 Eighth Avenue. The ruling pushed the sale from this past Thursday to Jan. 29 and forced Extell, which controls the mezzanine debt, to answer pointed questions about whether the auction is commercially reasonable or structured to chill bidding. It’s a procedural win for SL Green and RXR, but only a partial one.

At the center of the dispute is a familiar post pandemic setup. Worldwide Plaza is saddled with roughly $940 million in senior CMBS debt and about $190 million in mezzanine financing. After Cravath, Swaine & Moore decamped for Brookfield’s Two Manhattan West, vacancy shot to roughly 40 percent, and the property landed in special servicing in October 2024. By spring, the building was appraised at just $345 million, down from $1.7 billion in 2017, effectively wiping out equity and setting bondholders up for hundreds of millions in losses.

That valuation collapse opened the door for Barnett. Extell quietly acquired the mezzanine loan, positioning itself to foreclose on the controlling entity through a UCC sale. Control of that mezz slice would give Extell leverage over the future of the asset and its restructuring, even though the senior loan remains underwater.

Fast-forward to 2026 and SL Green and RXR responded by suing to block the auction, calling it a “sham” designed to guarantee Extell wins control. They claim the timeline was rushed, documentation incomplete and auction terms restrictive enough to scare off third party bidders. In short, they say the sale is less about recovering on debt and more about wresting control of one of Midtown’s most distressed former trophy towers.

In court filings, Barnett’s camp has argued that the owners have been in default for months and were notified of the auction well in advance. Extell also points out that the owners themselves have argued the building is worth less than the senior debt, undercutting claims of irreparable harm if the mezz position changes hands.

Per an order by the judge, Barnett now has to show that the auction complies with the Uniform Commercial Code and is not structured to chill bidding. Whether that hurdle proves meaningful or merely slows the inevitable will be clearer later this month.

If the sale ultimately goes forward, it could hand Barnett a powerful seat at the table in one of Midtown’s most consequential restructurings.

There was plenty of other real estate news this week. The first woman to accuse Oren and Alon Alexander of rape was found dead, Summit was confirmed as the buyer of Pinnacle’s mostly rent-stabilized portfolio and real estate magnate Stan Kroenke became the largest private landowner in the country.

Woman who first accused Oren, Alon Alexander of rape found dead

Kate Whiteman, one of two women who sued the brothers under New York’s Adult Survivors Act, has died. Australian police reported Whiteman’s death to the coroner for Australia’s New South Wales on Oct. 31, 2025, a spokesperson told The Real Deal. Her death is under investigation and a cause of death has not been determined.

Summit confirmed as Pinnacle buyer, ending fight with Mamdani

Summit purchased the mostly rent-stabilized portfolio for $451.3 million, or roughly $88,000 per unit, ending the weekslong battle with Zohran Mamdani. The result highlights the challenges ahead for the Mamdani administration as it tries to throw its weight between private transactions.

What’s next for Mark Nussbaum?

Once a go-to fixer in tri-state real estate, Mark Nussbaum is now facing a reckoning as lawsuits and criminal charges expose what could be more than $400 million in alleged escrow losses. Manhattan prosecutors have charged Nussbaum with stealing at least $15 million from escrow clients, while former clients claim his law firm misappropriated funds on a far larger scale. Nussbaum has pleaded not guilty and is due back in court in March.

“Yet another scam”: Italian investor accuses Michael Stern of fraud in North Beach deal

Italian investor Gianluca Vacchi has accused developer Michael Stern of orchestrating a “deliberated and calculated fraud” over a stalled North Beach condo-hotel deal in a lawsuit filed in December. Vacchi’s entity says it put $2.5 million into Stern’s planned redevelopment of the Casablanca based on promises of a quick, no-lose flip that never materialized.

Stan Kroenke takes crown as US’ largest private landowner

The billionaire developer and Los Angeles Rams owner purchased 937,000 acres of noncontiguous land in New Mexico last month, increasing his total holdings to more than 2.7 million acres across the American West and Canada.

Maverick quietly takes Chetrit interests at own auction

Maverick Real Estate Partners quietly snapped up Meyer Chetrit’s interests in two holding companies at its own foreclosure auction just days before Christmas Eve, as it continues to collect on a $132 million judgment. The aggressive lender, which has been garnishing Chetrit’s assets, emerged as the lone bidder at the auction, with court filings indicating no other participants showed up.

Two Roads dealt another blow in Edgewater condo buyout saga

Two Roads Development was ordered to restore the waterfront condo building in Miami’s Edgewater at the center of an epic lawsuit that has dragged on for years. The ruling marks the latest blow to the developer. It means Two Roads, a Miami and West Palm Beach-based firm led by Taylor Collins and Reid Boren, will have to return the Biscayne 21 building to a habitable state, including repairs and restoring utilities such as air conditioning, water and electricity.

J.P. Morgan predicts no Fed action on interest rates this year

A top economist expects the Federal Reserve to keep interest rates unchanged throughout 2026, with its next move likely a raise in 2027. Michael Feroli, J.P. Morgan’s chief U.S. economist, issued his revised outlook after a series of Fed cuts in late 2025 that helped bring mortgage rates to their lowest levels in more than a year. While financial markets continue to price in two additional cuts in 2026, Feroli argued economic conditions will not justify further easing.

Saks Global bankruptcy could put trophy real estate in play

Saks Global’s Chapter 11 filing is throwing dozens of marquee department stores, and the trophy real estate beneath them, into play. The owner of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman entered bankruptcy just over a year after its $2.7 billion Neiman deal, as luxury spending slowed and debt piled up.