The Graduate by Hilton hotel on Roosevelt Island has drawn another lawsuit, this one from its landlord: Cornell University.
Cornell says that the Graduate Hotel, which is on its tech campus on the island, has overstayed its welcome. The hotel defaulted on its 65-year ground lease and has refused to leave the premises after the lease was terminated, according to a complaint filed in New York Supreme Court Wednesday.
The case follows another suit against the hotel last week from lender ACRES Capital, who is hoping to claw back $79 million from the hotel’s owner, AJ Capital. The hotel has blamed ACRES for the hotel closure, according to court documents.
The Graduate Hotel is part of a chain that operates in college towns and is designed around college branding. Ben Weprin’s Nashville-based AJ Capital Partners launched the brand in 2014 with a first location in Athens, Georgia.
The hotel signed a 65-year ground lease with Cornell in 2018 to open a location on its Roosevelt Island campus, a Bloomberg-era initiative to bring the tech industry to New York. Base rent started at 1 percent of revenue and went up from there.
Hilton Hotels bought the Graduate branding from AJ Capital for $220 million in 2024. The two worked out a deal so that AJ Capital would retain real estate ownership and management of the 34 existing locations.
But the Roosevelt Island location closed down and ceased operations in November 2025. The Graduate told the university that it was no longer financially capable of operating the hotel.
Cornell said this would be considered a default, but in letters the hotel countered that the closure was involuntary and unforeseeable. The hotel blamed an affiliate of ACRES Capital, its lender, saying that ACRES had trapped operating revenue from the hotel to pay itself debt service and default interest.
“For more than a year, the Graduate by Hilton on Roosevelt Island knew that it was unable to meet its financial obligations as they came due,” William Brewer III, partner at Brewer, Attorneys & Counselors and lead counsel to ACRES in its separate suit responded in a comment. “When relief from these obligations was not gratuitously provided, they shifted to blaming others – including the lender – for their project failure.”
It’s not totally clear what revenue looked like at the Graduate. The hotel was meant to provide a space for students, parents, trustees and other out-of-towners to stay during visits to Cornell. But it’s possible that the hotel’s location, on an island between Manhattan and Queens, dampened its appeal to other tourists.
Cornell terminated the hotel’s 65-year ground lease, arguing that it stipulated that the property had to operate as a hotel. The hotel had also failed to pay utility services, according to the complaint.
In the time since then, the hotel has refused to surrender the property to Cornell. The university is looking for a court to eject the hotel and order monetary damages. Cornell also says it’s been out at least $605,000 in lost conference space rental revenue during the closure.
Neither AJ Capital, Hilton nor ACRES responded to a request for comment.
The suit from Cornell comes just a week after ACRES’ own suit regarding the hotel. The plaintiff in that case is looking to collect $79 million connected to a recourse guaranty signed by an AJ Capital affiliate.
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Roosevelt Island hotel lender looks to claw back $77M